Pak-Russia trade has improved since the launch of direct shipping service between the two countries in May this year, reports WealthPK. The first container ship from Russia berthed at the Karachi Port, opening a new sea route for direct shipping service between the two countries. This new route has enabled the immediate access of Pakistani products to the Russian market, with payments made through the local banking channel in Chinese yuan.

The new shipping service is the outcome of an agreement between Pak Shaheen (Private) Limited and Russian express liner service Neco Line. “Under the agreement, the first ship named MV Crystal sailed from St. Petersburg, Russia and berthed at the Karachi Port on May 25,” Pak Shaheen Limited CEO Abdullah told WealthPK. He said some issues needed to be sorted out to realize the full benefit of this direct shipping service; however, bilateral trade had seen some improvement since the start of this service.

Earlier, it took a lot of time for exported commodities to reach Russia through the transshipment points but now direct shipping service is helping exporters to ramp up shipments by taking advantage of the reduced shipping time, said the Pak Shaheen Limited CEO. He noted that it took more than 50 days for Pakistani fruit shipments to reach the Russian market through a third country, but now through the direct shipping service, the export consignments reach Russia within 19 to 24 days. “There is a huge demand in Russia for various Pakistani products, whose competitiveness will increase with the opening of the direct sea route,” he added.

According to a report from the Pakistan Business Council (PBC), trade between Russia and Pakistan has always been lopsidedly benefitting Russia. The bilateral trade is worth $757.6 million, with 40.1 percent of Pakistan’s exports to Russia, comprising textiles and related articles. Similarly, edible fruits account for another 34 percent of exports to Russia. Pakistan’s imports from Russia are worth $617 million with the major import items being cereals, edible vegetables, mineral fuels, rubber products, paper products, iron and steel, pharmaceutical products, fertilizers and organic chemical.

Pakistan’s exports to Russia are worth $145 million with the major export items being edible fruits, knitted textile products, cotton, leather products, made-up textile articles, non-knitted textile products, optical instruments, man-made staple fibers, toys and cutlery. The trade index indicates that Pakistan is better suited to supply to the Russian market as opposed to Russia supplying to the Pakistani market. This shows that the Pakistani export industry stands to gain more from the arrangements like direct shipping service, free trade agreement, etc.

According to a study, the Russian market throws an opportunity to Pakistan to increase its exports but is hampered by certain factors like the lack of banking and payment channels, absence of direct cargo and passenger flights, long transit periods, and increased freight charges, among others.

Credit: Independent News Pakistan (INP)