Supernova Airlines, which is part of the Nova Posta group of companies, received a Ukrainian operator’s certificate on January 6, allowing it to start cargo flights, the press service of Nova Posta said on Monday.
“We are the first Ukrainian carrier that was able to meet all the requirements and received the operator’s certificate in conditions of war. This is an example of the indestructibility of Ukrainians and a reminder to other businesses that now is the best time to invest in Ukraine,” Supernova Airlines director Yaroslav Krasnozhon said in the press release.
He emphasized that the company believes in VSU and understands that fast and safe logistics is very important to speed up the victory and provide Ukrainians with the necessary goods.
The first flight with cargoes of Nova Posta Global’s clients is planned for spring 2023, the report says. For this purpose the company already has two AN-26s, which it uses on leasing terms (UR-UZI and UR-UZM – IF).
According to the state register, the owner of both Supernova Airlines aircraft is Expedition Aviation (FZC) from the UAE.
“Supernova Airlines will operate flights from Ukrainian international airports Boryspil and Lviv after the end of the war, and while the Ukrainian sky is closed for flights, air transportation will be carried out from the nearest European airports to Ukraine,” the company said.
As reported, on October 1, 2021 Nova Posta group launched its own airline Supernova Airlines, which delivers international cargo, has its own fleet and is subordinate to Nova Posta Global.
The Joint Coordination Center (JCC) reported that due to unfavorable weather conditions, vessels were unable to leave Ukrainian ports during Tuesday.
“On January 10, due to unfavorable weather conditions, not a single vessel left Ukrainian ports within the framework of the Black Sea grain initiative,” the report reads.
It is noted that “due to the strong wind and large waves, the team of joint inspection was not able to board the vessels to conduct inspections”.
On January 9, dry cargo vessels were also reportedly unable to leave Ukrainian ports due to bad weather.
Five dry-cargo carriers headed for Ukrainian ports, which passed through the maritime humanitarian corridor on Tuesday.
The SCC reported that “76 applications for participation in the initiative have been submitted.”
“As of January 10, the total tonnage of grain and other agricultural products exported from the three Ukrainian ports is 16,945,661 tons. A total of 1,264 dry cargo ships have been allowed to move so far: 631 to arrive at Ukrainian ports and 633 to leave them,” summarized the JCC.
Ukraine’s international reserves as of January 1, 2023, according to preliminary data, amounted to $28.491 billion, which is 1.9% or $536.4 million more compared to November 2022 due to foreign exchange earnings from international partners that exceeded NBU interventions selling currencies to maintain a fixed exchange rate.
As the NBU reported on its website on Friday evening, in general, they decreased by 7.9%, or $2.45 billion over the year.
The National Bank clarified that net international reserves in December increased by 3.3%, or $579 million, to $18.318 billion, but over the year they decreased by 11.8%, or $2.45 billion.
According to the regulator, in December the dynamics of international reserves was affected by operations to manage public debt. In particular, foreign exchange receipts to the accounts of the government of Ukraine with the NBU in December amounted to $4.468 billion, including from the EU – $598.7 million, from the United States through the World Bank trust fund – $2.03 billion, from the placement of government bonds – $540.7 million, from the World Bank – $402 million, from the Government of Canada – $367.8 million, from other international lenders – $528.9 million.
The total amount of government payments for servicing and repaying state debt in foreign currency amounted to $833.9 million, including $119.6 million directed to repay debt to international creditors, $714.3 million – to service government bonds.
In addition, Ukraine transferred $166.2 million to the IMF.
International reserves were also affected by NBU operations on the interbank market. In particular, they sold $3.193 billion on the foreign exchange market and bought $29.6 million into reserves, due to which the balance of interventions was negative and amounted to $3.163 billion.
In addition, reserves were affected by an upward revaluation of financial instruments by $231.6 million.
According to the NBU, the current volume of international reserves provides funding for 3.6 months of future imports, which is enough to meet Ukraine’s obligations and current operations of the government and the National Bank.
As reported, at the beginning of 2022, Ukraine’s international reserves amounted to $30.941 billion, net international reserves (NIR) – $20.767 billion.
Ukraine last year exported, according to preliminary data, 99.8 million tons of products and goods of all kinds for a total of $44.1 billion, which is respectively 38.4% and 35% less than in 2021.
“Nevertheless, in war conditions it is a feat: to export almost 100 million tons of products (of which 16.3 million tons through the grain corridor) under conditions of the blockade of ports and constant attacks on the infrastructure. This is the first year that export volume and logistics have come to the fore,” Taras Kachka, deputy minister of economy and trade representative of Ukraine, wrote on Facebook on Wednesday.
According to his data, exports of 24.99 million tons of corn last year brought Ukraine $5.94 billion (+1% by 2021), revenue from foreign shipments of 4.29 million tons of sunflower oil (-16, 3%) was $5.46 billion (-14.4%), from 23.9 million tons of iron ore (-45.9%) – $2.9 billion (-57.8%), from exports of 11.2 million tons of wheat (-44.1%) – $2.6 billion (-44.7%), and from exports of 3.12 million tons of rape (+17%) – $1.54 billion (-8.6%).
“Sunflower seed made its way into the top 10 exports. We exported it 2.7 million tons worth $1.26 billion, 33 times more than last year. This is the volume that the oil extraction plants could not process. I hope that in 2023 we will have a reverse flow, when seed exports will decrease and oil exports will increase proportionally,” Kachka said in a statement.
According to his data, the export of one of the traditional leaders of industrial exports – 65.9 thousand tons of insulated wires brought Ukraine last year $1.32 billion, which is 16.4% less than in 2021. This reduction was caused by a 13.6% drop in wire exports.
“Next in the ranking – semi-finished steel products and hot-rolled steel – illuminate the whole tragedy of the Ukrainian metallurgy. The drop in volume for the year is -72%. Total exports of semi-finished steel 1.9 million tons worth $1.1 billion, and hot-rolled steel 1.3 million tons worth $1 billion. But even more vividly compare January and December. In January there were 404 thousand tons, in December – 31 thousand tons,” emphasized the trade representative.
Kachka specified that foreign sales of soybeans in 2022 was a rare case of significant growth in spite of the war: physical volume of export increased 81.6% up to 1.99 million tons compared to 2021, while revenues increased by 43% up to $862 million.
In turn, poultry exports were down 10% by 2021 to 413,000 tons, but it brought in 19% more revenue – $852 million.
According to the trade representative, geographically 63% of exports were in the EU ($27.9 billion). Among the EU countries, last year Poland ($6.6 billion), Romania ($3.8 billion), Hungary ($2.27 billion), Germany ($2.23 billion), Italy and Spain ($1.5 billion) received the most.
Outside the EU, the largest export market is Turkey ($2.9 billion), which is ahead of China ($2.46 billion), although it is respectively 29% and 69% less than in 2021.
In addition, imports to Ukraine in 2022 in physical terms have almost halved (-48.1%), and in monetary terms – 19.6%. In 2021, Ukraine imported 35 million tons of products worth $58 billion.
“Of the 99.8 million tons by sea exported 53.8 million tons. This is 55% less than last year. By rail, 33.7 million tons were exported. “Iron” stability is +3.4% or +1.1 million tons compared to 2021. 12 million tons were exported by road, and that’s a fantastic 32.4% increase over 2021,” the trade representative summarized in a statement.
Ukraine’s state budget deficit in December due to the receipt of a significant amount of grants decreased to 99 billion UAH from a record level of 170 billion UAH a month earlier, including the general fund – to 101.3 billion UAH from 163.3 billion UAH, the Ministry of Finance said on its website.
According to its operational data, in general, the state budget of Ukraine in 2022 executed with a deficit of 911.1 billion UAH, including the general fund – 909.5 billion UAH against the planned in the estimate 1399.5 billion UAH.
The Ministry of Finance specified that the actual state borrowings to the general fund of the state budget for 2022 amounted to 1261.1 billion UAH or 67.3% of the planned for this period, including from the placement of government bonds, 666.9 billion UAH, of which 103.9 billion UAH in foreign currency ($2.1 billion and EUR 980.6 million), and by 400 billion UAH hryvnia securities were purchased by the National Bank.
According to preliminary data of the Ministry of Finance, about $31 billion was financed from foreign sources, including about $14.3 billion, or 480.6 billion UAH in grants, which are recorded as state budget revenues.
As reported, in 2021, the deficit of the general fund of the state budget of Ukraine was 166.8 billion UAH, including in December – 108.1 billion UAH.
The state budget of Ukraine for 2023 was approved with a marginal deficit of 1296.5 billion UAH, including for the general fund – 1124.6 billion UAH.
Global equity markets are ending the year with the steepest declines in years, while for the bond market, 2022 will be the worst year in the 21st century.
Investors are cautiously optimistic about the year ahead, hoping for an end to the cycle of interest rate hikes, a Chinese economic recovery and a resolution of the conflict in Europe. However, their plans may be hampered by five key risks, according to Bloomberg.
INFLATION
“The bond market expects inflation to return to an acceptable range in the next 12 months,” said Matthew McLennan of First Eagle Investment Management.
But that outlook could be misleading, he cautioned, because rising wages and supply-side pressures, including energy prices, could lead to long-term increases in consumer prices.
If inflation proves more resilient than the market suggests, the Federal Reserve and the European Central Bank are unlikely to stop raising rates in the first half of the year, let alone lower them. In turn, this will cause further declines in stocks and bonds, a stronger dollar and difficulties for emerging markets. Rising borrowing costs could also trigger a recession.
“The Fed has failed to anticipate inflation and in its quest to beat inflation may miss the looming problem in the financial market,” McLennan warned. – It is quite possible that the Fed is underestimating the risks of financial disaster.”
CHINA’S PROBLEMS.
China’s stock index has jumped 35% from its October low on expectations of the removal of recent restrictions and lockdowns in the world’s second-largest economy.
But there is a danger of an uncontrolled rise in coronavirus diseases that China’s health care system cannot cope with, and then the country faces a collapse in business activity.
“The disease trajectory in China will rise and peak only a month or two after the Lunar New Year,” said JPMorgan Chase market strategist Marcella Chow.
China’s stock market recovery remains fragile and the prospect of declining economic activity could collapse demand for commodities, especially industrial metals and iron ore.
SITUATION IN UKRAINE
“If the situation worsens, NATO gets more involved in the fighting, and sanctions increase, that would be quite a negative,” said Nikko Asset Management senior strategist John Weil.
Secondary sanctions on Russia’s trading partners, mainly India and China, will only intensify the effect of existing bans at a very dangerous time for the global economy, he added.
“The world faces a supply crisis in terms of food, energy and other commodities, including fertilizers, some metals and chemical products,” the expert wrote.
COLLAPSE OF EMERGING MARKETS
Many investors expect a weaker dollar and lower fuel prices in 2023 to support emerging markets.
However, any difficulties in fighting inflation will keep the dollar down, and escalating hostilities in Ukraine is just one of many risks that could lead to another surge in fuel prices.
“It could very well turn out to be another tough year for emerging markets,” says Shane Oliver, head of investment strategy and economics at AMP Services Ltd. Shane Oliver. – “The still high likelihood of a rising dollar is a negative factor for them because many have dollar obligations.
A stronger dollar makes it difficult for countries to service U.S.-currency-denominated government debt.
THE RETURN OF THE CORONAVIRUS
The emergence of a more contagious or deadly strain of coronavirus, or even the spread of existing variants, could cause supply chain problems again, which in turn would cause inflation to rise and economic activity to slow.
“We think the impact on macroeconomics and growth will be felt mainly by large economies and countries that are more dependent on foreign trade,” JPMorgan’s Chow said.
However, her baseline scenario assumes that the coronavirus will continue to retreat, and the main negative factor for markets will be a possible recession in the U.S. and Europe.
