Russia-Ukraine War: Hard blow to Italian footwear

The war between Russia and Ukraine that keeps the whole world in suspense, in addition to the human consequences, permanently adds new situations in the social, economic and commercial order.

The imposition of sanctions and retaliation between both sides, which has repercussions in blockades and restrictions of different kinds, seriously affects international trade at the level of transactions, prices, supplies and payments.

In the particular case of Italy, which has maintained strong trade relations with Russia and Ukraine for many years, for the chain that makes up the footwear industry, the outlook is quite bleak. For Italy, footwear orders from those two countries have fallen notably, in addition to the cancellation of others in progress. The harsh sanctions imposed on the banking system make commercial transactions impossible, all of which has put the Italian sector on alert.

To the impediments in sales, on the other hand, for Italy is added the interruption in the supply of gas from Russia, which means 43% of imports, which foreshadows an acute energy crisis, which will significantly affect industrial activity. Other products exported by Russia to Italy are oil, cereals and various raw materials, which suffer significant increases in their prices.

The overall volume of trade in 2021 between Russia and Italy exceeded €20 billion, corresponding to €7.7 billion for shipments from Italy to Russia and €12.6 billion for imports from Russia.

In the package of Italian exports to Russia in 2021, footwear had a turnover of 220 million euros, for approximately 3 million pairs, which meant a growth of 9% compared to 2020. For its part, Ukraine imported 400 thousand pairs in 2021, worth 30 million euros, which represented an increase of 16% compared to the previous year. The data was provided by Siro Badon, president of ASSOCALZATURIFICI, the highest entity that brings together Italian shoemakers.

Among the Italian regions most affected by the war, is Le Marche the largest footwear producing center, made up of the provinces of Ancona, Ascoli Piceno, Fermo, Macerata, Pesaro and Urbino. More than 3,200 factories with 22,000 workers make up the productive force, responsible in 2021 for 112 million euros in footwear exports to Russia, while more than 30 million were invoiced to Ukraine. This was reported by Paolo Silenzi, sector leader of Montegranaro (Fermo).

The region represents 30% of total footwear exports, with an average price per pair of 68 euros.

For his part, Valentino Fenni, president of the Confindustria Adriatic Center shoemakers, wondered that "if Russian current accounts are blocked, who will pay for the orders?" For this reason, he considered that businessmen are at risk of losing two seasons, which will have a high impact on companies and employment. "There are many factories here that depend on sales to Russia and Ukraine," he said.

Among Italian industrialists there is awareness that the war conflict will influence a lower demand from Poland, the Baltic Republics, through Georgia and Kazakhstan, and in general from all Eastern European markets. For this reason, many of them are turning their eyes to the domestic market.

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