The influence of the Russian-Ukrainian war in the Azerbaijani construction market has been announced
The construction sector of Azerbaijan is interconnected with the Russian market. Naturally, the price increase and other consequences resulting from the sanctions imposed on this country also affect the construction market of Azerbaijan.
Currently, the status of the report in this area is investigated with the “Report” construction sector experts.
Working man in the construction sector Elgiz Eyvazov believes that the prices of goods from Russia will automatically increase. At the same time, the price of goods produced in Turkey also rises:
“Countries are related to each other. This affects the other when there is a problem in a country in a country or the problem in logistics. The price of products from Turkey increased by 15–20%. For about 5-6 days, this process is observed. As usual, we will set our 10% margin to the cost of the product. Most iron products related to the construction sector from Russia to Azerbaijan are imported. That is, more will increase in the price of these products. I think Iron products will be replaced by local products. There will be a price increase because there is a demand for these products.
The head of the store selling iron products Sayyad Nasirov confirms that there is a change in prices, and this process is likely to be continuous:
“Baku Construction Industry” OJSC operating in Azerbaijan brings raw materials from Russia and manufactures finished products here. It is also distributed from the factory to stores. For now, that plant cannot import goods from Russia.
Nasirov said that the price of iron products increased by 30–40 manat in terms of tons:
“1 ton of thin profiles is 1,600 manat. The tone of bold profiles is sold in 1,500 manat. The cost of sex production of sex production is 940 manat + VAT (18%), and the plant is 1,500 manat + VAT “.
Chairman of the Board of Directors of “Baku Construction Industry” OJSC Ramiz Ahmadov noted that they have not seen any difficulties yet. At the same time, he said that they are taking measures against any danger and are considering backup options.
“We made orders from Russia in US dollars. Currently, it is likely that the trade will be conducted in rubles. Because we have an account with Russian producers in rubles. It is not yet clear what happened. Our analysts consider various options, check alternative markets. It is observed that the prices are rising. The prices of the inputs we buy from Turkey for production have also risen sharply.”
Although R. Ahmadov says that customers are worried about the delivery of building materials to stores, he thinks that this is temporary.
Ramiz Isayev, chairman of the Union of Commercial Legal Entities of the Association of Azerbaijan Construction Manufacturers, told “Report” that the sanctions imposed by Western countries against Russia are also affecting Russia’s trade partners: “According to the foreign trade statistics announced by the Azerbaijan State Customs Committee for January of this year, Ukraine and Russia as one of the main trade partners of our country, it occupies the 3rd and 4th places in the trade turnover, respectively. There is no doubt that the ongoing war will affect this trade cycle.”
“The ongoing war between Russia and Ukraine will have a negative impact on the import of construction materials to our country. But the factor affecting the price of construction materials imported from Russia is not only the tension between Russia and Ukraine. So, local entrepreneurs mainly import wood materials from Russia. According to the decree signed by the President of Russia in 2021, the import of firewood in unprocessed form has been prohibited since January 1 of this year. This means that local entrepreneurs will no longer be able to import wood materials in the form of raw materials and will import wood in the form of finished products (timber, etc.). This will cause a difference in the cost of goods. Thus, even before the Russian-Ukrainian war, we witnessed an increase in the prices of imported wood materials,” the chairman of the Union announced.
R.Isayev also said that Russia is China, the third of the world’s largest purchaser, and after the third Azerbaijan: “50% of tree materials exported from Russia, and Azerbaijan, and Azerbaijan, each of Uzbekistan and Azerbaijan. This is a very large percentage.
At present, the deportation of the rubles is also one of the factors that can affect the price of imported construction materials. But we can see that the sanctions applied to Russia can also affect the country’s export operations, but we can say that the price will be inevitable. Thus, Russia can apply to the extension of strategic importance to the export of products, which can cause reducing or suspension of production. On the other hand, the bans applied in different directions can also be difficult to import this country.
R.Isayev also noted that the tree materials imported to our country are not imported from Russia only:
“The ones imported from Russia are just dominant. Ukraine and Kazakhstan act as an alternative market in this area, and it is difficult to import wood materials from Ukraine at the present time. In this case, the Kazakhstan market can act as the last alternative option in this field. In the current situation, it seems inevitable that the price of construction materials, especially construction materials imported from Russia, will rise. As a result, this affects the cost of construction and will lead to an increase in prices in the construction market.”
İstinad “Report”
