Wednesday July 24, 2024

Pakistan-Russia direct shipping service to begin on May 25

By Tanveer Malik
May 19, 2023

KARACHI: A direct containerised shipping service linking Pakistan and Russia is scheduled to commence operations later this month, opening up enhanced trade access for Pakistani products in the lucrative Russian market, an official said on Thursday.

“The first ever ship will call on May 25, 2023 at Karachi Port,” Abdullah Farrukh, Chief Executive Officer (CEO) Pak Shaheen (Pvt) Limited, who is also Convener Shipping Affairs, Federation of Pakistan Chamber of Commerce and Industry (FPCCI) stated.

Pakistani products were being exported to the Russian market via transshipment earlier, which caused delay and enhanced freight cost.

Abdullah said direct shipping would facilitate in exporting textiles, sports goods, surgical items, Himalayan Salt, rice, leather goods, gloves, apparels, fruits and vegetables and confectionary items from Pakistan to Russia, a notification of FPCCI stated. It said that direct containerised shipping service would be between Karachi and Saint Petersburg of the Russian Federation.

“It is a significant step in the current economic situation of the country and will support Pakistani exporters, who were otherwise, sending their products through transhipment,” he added.

About the payment mode, the CEO said the payment would be made in Chinese currency Yuan for shipments as Russian importers would pay to Pakistani exporters in Chinese currency. He said that Chinese and Pakistani banks would be involved in these transactions.

According to a report of the Pakistan Business Council (PBC), bilateral trade between Russia and Pakistan has always been in favour of Russia. Bilateral trade reached an all-time high in 2020 worth $757.6 million. In 2020, 40.1 percent of Pakistan’s exports to Russia comprised of textiles and textile articles .

Similarly, edible fruits accounted for another 34 percent of Pakistan’s exports to Russia. Pakistan’s imports from Russia in 2020 were worth $617 million with the major import items being cereals, edible vegetables, mineral fuels, rubber products, paper products, iron and steel, pharmaceutical products, fertilisers and organic chemical.

Pakistan’s exports to Russia in 2020 were 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 fibres, 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 a potential FTA between the two countries.

Abdullah said that the transshipment of Pakistani products to the Russian market was taking a long time and benefiting other countries, through which these products were transshipped. Pakistani fruits were taking more than fifty days to reach the Russian market via other countries, with the direct route, these shipments would now land in the Russian market in only 24 days.

He said that the Russian market is huge and offers major export potential to Pakistani products. He said that during his visit to Russia recently, he noticed major demand of Pakistani products, which were reaching Russia via other countries. He said that direct shipping service will make Pakistani products more competitive in the Russian market.