Lithuania pushing to open Chinese market for agricultural exporters

By bne IntelliNews November 19, 2015

Lithuania has signed a protocol with China on veterinary and hygiene requirements for exports of dairy and livestock products, Vilnius announced on November 19.

The agreement paves the way for Lithuanian exporters to enter the vast Chinese market, potentially speeding up efforts to diversify to aid the recovery of exports. Falling overseas sales have been a drag on the Lithuanian economy, largely an effect of the Russian embargo on the Baltic state’s agricultural production.

The agreement will act as a basis for Lithuanian firms to apply for export certificates. “It is these certificates Lithuania is waiting for in order to … launch exports [to China]”, Prime Minister Algirdas Butkevicius said in a statement. The actual launch of exports may, however, take months, after all technical details have been agreed, The Baltic Course reports.

After weakening already in 2014, Lithuanian exports are likely to continue to drag on the economy this year. The recession in Russia is a particular issue, as is Moscow's embargo on EU agricultural produce. Lithuania is by far the most exposed due to its traditional trade relations. Russia's share in Lithuanian exports stood at 13.3% in January-September, an annual fall of 41.4%, the Lithuanian statistical office notes.

However, Lithuanian exporters are gradually building a position in other markets as they put in effort to redirect sales. Exports to the EU made up 66.6% of all overseas sales in January-September, representing growth of 7.1% y/y. Exports to China have tripled in the last four years, according to the Lithuanian presidential office.

Export growth is expected to pick up somewhat in the final quarter of 2015 and during 2016, the European Commission noted in its autumn economic outlook published on November 5.

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