Ukraine rarely trades with Korea… Korea also ranks 5th for Ukraine medical instruments import
Analysts say Russia’s invasion of Ukraine will damage Korea’s medical device industry.
It is expected that the impact in the medical instruments sector will be greater than that of pharmaceutical products in the healthcare industry.
On the 28th, Korea Bio-Economy Research Center (KBERC) from KoreaBIO (Korea Biotechnology Industry Organization) published a report titled “The Impact of the Russia-Ukraine Crisis on the Healthcare Industry.”
According to the report, Russia’s pharmaceutical market is $28.2 billion as of 2020, the second largest in the European market after Germany, but most of them are led by multinational pharmaceutical companies.
Ukraine also imports pharmaceutical products mostly from China, India, Russia, Spain, and Switzerland, and trades with Korea are minimal, the report says.
On the other hand, in the field of medical instruments, Korea is the fifth-largest importer in both countries after China, Germany, the United States, and Japan.
The imports of Russia reached $230 million (based on the KOTRA report) in 2020, and Ukraine $2,300 (based on the Customs Service HS9018).
However, both exports to Russia and Ukraine are increasing remarkably in the pharmaceutical market in the aftermath of COVID-19, according to the data from the Korea Customs Service.
As a result of Newsmp’s analysis, exports of pharmaceutical products (HS30) to Russia last year amounted to $100.92 million, up 2.6 times from the previous year (2020), exceeding $100 million). The average annual growth rate between 2017 and 2021 has reached 43%.
Pharmaceutical products to Ukraine also grew 42.2% annually over the same period, exceeding $20 million last year.
Although Korea’s pharmaceutical products exports surged last year, Russia’s proportion doubled from the previous year to 1.2%, and Ukraine maintained 0.2%.
Exports of medical instruments (HS9018) to both countries are also steadily increasing. Exports to Russia rose 23.4% annually, approaching the $100 million mark last year, and Ukraine also neared the $20 million mark with an annual average increase of 34.8%.
Russia’s proportion of Korea’s medical instruments exports has remained at the 4% level over the past three years, and Ukraine has increased year by year, approaching the 1% level last year.
Exports of diagnostic reagents (HS3822) are changing significantly due to the COVID-19 pandemic.
Exports to Russia did not exceed $4 million until 2019 but soared to $59.34 million in 2020 and fell to $15.02 million last year.
On the other hand, exports to Ukraine have increased year by year, reaching $8.26 million last year.
In particular, Korea’s healthcare sector leaves most of its exports in surplus in trade with the two countries.
Considering that Korea’s exports of pharmaceutical products and medical instruments are still growing, the market is more meaningful than the size of exports.
Russia made a surplus of $95.5 million, 96% of Korea’s pharmaceutical products exports of $100.92 million last year, $95.51 million, 99% from $97.58 million in medical instruments exports, and $14.37 million, or 96% of $15.02 million in diagnostic reagents.
Ukraine also left a $20.8 million surplus in pharmaceutical products exports and $19.77 million in medical instruments exports, while exports of diagnostic reagents also recorded a surplus of $7.31 million out of $8.26 million.
However, the recent Russian invasion has raised concerns about the export payments.
The KBERC said the U.S. Department of the Treasury has not yet taken any restrictions on the export payments for pharmaceutical products and medical instruments, but there are uncertainties such as the addition of Russian economic sanctions in the future.
Moreover, the KBERC mentioned the possibility of delay or suspension of multinational clinical trials in Russia and Ukraine.
