Trade turnover between Azerbaijan and Russia has most diversified commodity nomenclature

The Azerbaijan-Russia trade turnover increased by 71.5 percent over the year and amounted to $ 1.455 billion in the first half of 2011, Russian trade representative in Azerbaijan Yuri Shedrin said last week.

Russian exports increased by 58.9 percent to $776.1 million, exports from Azerbaijan rose by 88.5 percent to $679.2 million.

"Our main goal is to overlap the record indicators of 2008, when trade amount reached $2.4 billion. Our assessment inspire confidence that this year we will be able to reach a new record and to approximate the amount of trade between the countries to $3 billion," said Shedrin.

Export of basic goods from Azerbaijan to the Russian Federation in 2008

Import of basic goods from the Russian Federation to Azerbaijan in 2008

Export of investment goods to the Russian Federation in 2008

Imports of investment and innovation goods from the Russian Federation in 2008

Source: The Azerbaijani State Statistics Committee

He said the volume of monthly growth in trade between the two countries once again confirms the possibility of reaching record levels. In the first half year, the Azerbaijani gas supply to Russia amounted to one billion cubic meters, which enables to bring this figure this year to the previously-approved 2 billion cubic meters, Shedrin said.

"Azerbaijan mainly exports fruits and vegetables, and wine and brandy products. The basis of Russian exports as before are products of machine building, metallurgy, food industry and wood," he said.

Based on the statistics of the State Committee, one can confirm that trade with Russia has one of the most diversified commodity nomenclature in Azerbaijan's foreign trade.

Food products , machinery, equipment, vehicles, metals and items thereof, wood, chemical products, pulp and paper products occupied a significant proportion in the structure of exports from Russia to Azerbaijan in 2010. Stavropol and Krasnodar are the main grain suppliers to Azerbaijan. Azerbaijan is also a leader among the CIS countries in terms of consumption of Russian confectionery. Azerbaijan imported the Russian confectionery and chocolate amounting to 17,000 tons at about $ 17 million in 2010. The Russian alcohol production - Russian vodka and cigarettes are in a great demand in the Azerbaijani domestic market. The volume of Russian cigarettes imported in Azerbaijan in 2010 totaled 6.3 billion pieces amounting at $ 121.2 million and vodka - 19,600 deciliters at $ 2 million.

One can name cement and cement clinkers among a wide range of investment goods imported from Russia to the Azerbaijani market. In 2010, Azerbaijan imported from Russia cement and cement clinkers in the amount of 643,200 tons worth $ 30 million. The country's priority also was timber, which was imported in the amount of 600 million cubic meters, cars, trucks and special purpose vehicles - 13,332 pieces in 2010 and semi-finished products of ferrous metal in the amount of 38,000 tons.

Russia mainly imported from Azerbaijan food products, textiles and articles thereof, mineral products, chemical products, machinery and equipment, metals and products thereof in 2010. Fruits and vegetables occupied the biggest share in the Azerbaijani exports to Russia. For example, the Russian domestic market received around 170,000 tons of fruit at $ 96 million in 2010. Fruit and vegetable juices, including pomegranate juice prevails, making the Azerbaijani products supply to the Russian market very popular. Export of the Azerbaijani wine and brandy made ​​ 221 thousand decalitres at $ 5.4 million.

2010 also marked favorable opportunities Azerbaijan has become for growth of trade turnover between the countries due to the resumption of gas cooperation a net gas exporter to Russia. The Azerbaijani natural gas supply to Russia in 2010 amounted to 800 million cubic meters. In 2011-2012 the figure will be increased to 2 billion cubic meters. Due to this gas agreement, the Azerbaijan-Russia trade turnover could rise by hundreds of millions of dollars in the short term.

Based on the terms of the Azerbaijan-Russia agreement on oil transit through the territory of the Russian Federation dated Jan. 18, 1996, the Azerbaijani side provides transportation of oil via the Baku-Novorossiysk pipeline. In 2010, 2.25 million tons of oil was pumped via this route.

Exports of basic goods from Azerbaijan to the Russian Federation in 2010

Import of basic goods from the Russian Federation to Azerbaijan in 2010

Export of investment goods to the Russian Federation in 2010

Imports of investment and innovation of products from the Russian Federation to Azerbaijan in 2010

Source: The Azerbaijani State Statistics Committee

Business people have much contributed in the development of the Russia- Azerbaijan economic relations at the regional level. More than 500 Russian enterprises and organizations are involved In foreign trade with Azerbaijan . The largest Russian companies in Azerbaijan are Lukoil-Azerbaijan, Baltika-Baku - a company of the 21st century, VTB Bank (Azerbaijan).

It should be noted that Nikoil bank - the Azerbaijani bank with participation of the Russian capital is first among the Azerbaijani banks to introduce the Islamic banking product "Wadia yad Daman" and is developing three other products in this area. Developed products take into account all the high requirements of Shariah and at the same time do not contradict the Azerbaijani legislation.

Over the past two years, the Russian business has implemented a number of investments in Azerbaijan's non -energy sector. Based on the official statistics of Azerbaijan for 2005-2010, non-oil sector of Azerbaijan, Russian companies invested $ 88.2 million in Azerbaijan's non -energy sector and $19.3 million in fixed capital.

The Russian direct investments in Azerbaijan's non-oil sector million. USD

Source: The Azerbaijani State Statistics Committee

Russia 's Vneshtorgbank (VTB) bought 51 percent of Azerbaijan 's AF Bank in 2009, carried out its re-branding and renamed to VTB Bank (Azerbaijan). Today, the bank considers over 5 projects, with the possibility of providing loans worth up to $ 100 million.

There are opportunities for expansion of Rosselxozbank in the banking and financial sector of Azerbaijan due to the opening of its office in Baku in June 2010. A Russian-Azerbaijani joint venture producing bentonite clay operates in Azerbaijan, in which the Russian party invested more than $ 3 million. A brewery in the Khirdalan town was modernized in the amount of $ 20 million (purchased in 2009 by "Baltika", St. Petersburg) and production of own products was launched.

The total volume of the Russian investment in Azerbaijan amounted to about $2.5 million in 2010, which is increased by 4 times compared to the figures of five years ago.

In turn, the Azerbaijani company "Azersun Holding" put into operation a tea-packing factory in the Belorechensk city (Krasnodar Territory) worth $ 2.5 million in September 2010 and plans to invest an additional $6 million to the revival of tea plantations. The company launched a project to build a canning plant for processing of fruits and vegetables with a capacity of 50 million standard cans. Investment worth $ 8 million is planned to be made in this project.

The Azerbaijani- Russian economic relations have gained sustained positive development in recent years. Today, both Russia and Azerbaijan give great importance to the regional development, particularly the establishment of direct inter-regional relations. The inter-regional cooperation plays an important role in the development of the Russian-Azerbaijani trade and economic relations and increasing trade. Today, companies of 71 of 83 subject of the Russian Federation are involved in foreign trade with Azerbaijan involved, 15 Russian regions signed an agreement on trade-economic , scientific-technical and cultural cooperation. Nine subjects of the Russian Federation - Moscow, Moscow region, St. Petersburg , Nizhny Novgorod, Stavropol, Sverdlovsk and Samara regions, Tatarstan and Dagestan are particularly active in the development of interregional tie.

The Trade Mission of the Russian Federation has been operating in Baku since March 2006 .