As the fallout of the Russia-Ukraine war spreads, Turkey’s exports to both countries slid significantly in March after the conflict-hit shipments and sales of some industries all but dried up.

Exports to Russia and Ukraine dropped 55.3% month-over-month to $293.1 million (TL 4.32 billion) in March, according to data compiled from the Turkish Exporters Assembly (TIM), down from $655.5 million in February.

March figures demonstrated the biggest impact yet of the Russian invasion of Ukraine, said TIM head Ismail Gülle.

Nevertheless, Turkey’s exports managed to achieve the highest March figure ever, rising 19.8% to $22.7 billion, while imports rose 31% to $30.95 billion.

But its trade deficit surged 76.7% year-over-year to $8.24 billion, mainly due to a 156% rise in energy import costs.

Russia’s invasion of Ukraine has sent global commodity prices soaring, threatening to derail Turkey’s new economic program that aims to record a current account surplus.

Turkey imports almost all of its energy needs and a major part of the basic foodstuffs, such as wheat and corn, which have all seen their prices surge between 25% and 40% this year.

Sales to Russia slipped nearly 40% year-over-year in March and 42.1% compared to the previous month to $252.4 million, the data showed.

Exports totaled $419.8 million in March 2021 and $435.87 million in February of this year. Shipments in the first quarter were thus down 4% to nearly $1.1 billion, according to the data.

The drop in sales to Ukraine has been much steeper, as exports plunged nearly 80% in March on annual basis and 81% compared to the previous month to $41.7 million.

Turnover amounted to $207.5 million in the same month a year ago and stood at $219.8 million in February of this year.

Exports in the first quarter were 8.6% lower year-over-year and totaled $442.8 million, the data showed.

"We had not seen a very big impact in February, but looking at March, there is a 40% drop in exports to Russia and 80% fall to Ukraine," Gülle told Anadolu Agency (AA).

"We hope that the peace negotiations will bring the matter to a certain point, and world trade and our trade will continue with the least impact from this."

Turkey shares a maritime border with Ukraine and Russia in the Black Sea and has good relations with both.

While it has criticized Russia's offensive, Ankara is trying to balance its close ties and has positioned itself as a neutral party trying to mediate.

Ankara has strong tourism, gas supplies, grain and other agricultural trade links with Russia, as well as a nuclear power project.

Growing tourism, trade and defense ties with Ukraine are also important for Turkey, which has said it backs Ukraine's territorial integrity.

Russian natural gas made up 45% of Turkey's gas purchases last year, which hit a record level as a result of drought and a related rise in gas-driven power production.

Turkey also imports crude oil from Russia, with annual amounts varying between 10% and one-third of its crude imports.

Turkey depends heavily on the two countries for grain although the Agriculture Ministry has said it does not expect supply shortages due to the invasion.

Russia accounted for 56% of Turkish grain imports in 2021 at $2.24 billion, while imports from Ukraine amounted to $861 million.

In contrast to exports, Turkey’s imports from Russia surged rapidly in March as energy prices soared. Imports increased to $4.1 billion, compared to $2.54 billion in March 2021 and $3.86 billion in February of this year.

This granted Russia top rank in Turkey’s imports both in March and the first quarter, when total purchases soared 108% year-over-year to nearly $12.61 billion, according to the data.

Almost half of Turkey’s $8.24 billion trade gap in March was registered in exchange with Russia. The gap with Russia reached $3.86 billion last month and $11.54 billion in the first quarter.

Many industries were unable to make any sales, particularly to Ukraine, in March, including hazelnuts, carpets, dried fruits, water products, jewelry, tobacco, and the olive and olive oil sector.

Other sectors shouldering the exports to Ukraine, including chemical products, steel and iron, automotive, machinery and parts, textile and raw materials, saw their sales drop around 90%, according to the data.

The chemical industry’s sales plunged over 96% to just $2.25 million in March, down from more than $57 million in the same month a year ago.

Although to a less extent compared to Ukraine, sales to Russia also saw a noteworthy decline, particularly in the automotive industry.

Sales of fresh fruit and vegetables, for which Russia is among the top markets, dropped 43.2% last month to $39.4 million, down from $69.35 million a year ago.

The automotive industry, which holds the highest share in exports to Russia, saw its sales falling more than 68% to just $18.35 million, compared to $57.7 million in March 2021.

Losses in industries such as ready-to-wear, textile, steel, cement and leather all topped 30%, the data showed.