The latest data of the Kosovo Customs show that export value of Kosovo during 2021 reached a total of 713 million Euro, which presents a significant increase compared to 2020 (475 million Euro).
The largest export partners are US (17.3%), Albania (15.4%), North Macedonia (11.9%), Italy (8.2%), Germany (8.1%), Switzerland (7.1%), Serbia (5.9%), Montenegro (3.4%), Turkey (2.5%), Bulgaria (2.3%), Bosnia and Herzegovina (1.5%), and others (16.3%).

US is the biggest market for export for Kosovo. The overseas export, such as in the United States which is the final destination of the bulk of our export, is mainly performed by larger companies with more experience and resources. However, generally speaking, due to the geographical proximity and cultural knowledge, MSME firms typically export in neighboring countries and European market.

Trading closer to home market or in countries with the same culture and language, such as Kosovo and Albania, might be a better way for MSMEs to start exporting. Often, small businesses begin exporting in markets covered under regional agreement, such as CEFTA in the context of Balkans. Specifically, Albania represents the largest export share to the regional countries with 15.4% of the total export. This is rooted on the sound trade relationships that have traditionally dominated between the two countries. Moreover, this might be partially explained by the recent intergovernmental agreements between Albania and Kosovo to facilitate the trade and reduce the bureaucracies. The data of the past year indicate that Kosovo has exported towards Albania mainly iron and steel, beverages, plastics, aluminum, mattresses, wheat flour, etc. The table below summarizes the main export products to Albania.

Export to Albania from Kosovo

Source: Kosovo Customs (2022)

However, despite a large export value from Kosovo to Albania, the share of MSMEs is still limited. The list of the export products above signals that many of them are related to the activities of MSMEs and they are provided as an example for MSMEs of Kosovo for raising the awareness. With respect to export potential, the study by Riinvest Institute and GAP Institute (2020) reveals that the largest export potential from Kosovo to Albania lies in manufacturing (base metals, food products, rubber and plastic, products from various metals, and beverages) and electricity supply sector. Concerning the former, products like ferro-alloys, cast iron or steel pipes, plastic construction equipment, carbonated water or sweetened minerals, and malt beer indicated the highest export potential.

In this context, BPB has been working for many years with companies specialized on foreign trade that provide similar products and our expert bankers are ready to assist MSMEs of Kosovo on their efforts to start or improve export performance. Therefore, there is an emerging opportunity window for MSMEs by the increase in export to Albania.

For Kosovan MSMEs that aim to start/increase their export towards Albania, have in consideration the following aspects:

• Research: conduct preliminary market research to identify the demand for your products in Albania. Also, investigate whether your competitors in Kosovo are exporting and who your local competitors would be in Albania
• Local legislation: check local regulations to make sure you comply with local legislation in Albania or cultural requirements (product properties, product name or packaging)
• Make a plan: Evaluate whether your company has the right product/service range, the financial and human resources to satisfy the product demand in Albania

For more insights on the export potential of Kosovan MSMEs, check our article “Export Potential of a Small Company”.

References
Riinvest and GAP Institute. (2020). Kosovo – Albania Trade Potential: Trade Barriers and the Implementation of Bilateral Agreements. Prishtinë: Riinvest Institute. Retrieved from https://www.riinvestinstitute.org/uploads/files/2020/June/04/Kosovo_Albania_Trade_Potential1591270252.pdf