A direct containerized shipping service between Pakistan and Russia is set to begin operations later this month, providing improved trade access for Pakistani products in the lucrative Russian market. The first ship is scheduled to call at Karachi Port on May 25, 2023, marking a significant development for Pakistani exporters.
Previously, Pakistani products had to be transshipped to reach the Russian market, resulting in delays and increased freight costs. The introduction of direct shipping will facilitate the export of various goods, including textiles, sports goods, surgical items, Himalayan salt, rice, leather goods, gloves, apparel, fruits, vegetables, and confectionery items from Pakistan to Russia.
The direct containerized shipping service will operate between Karachi and Saint Petersburg in the Russian Federation. This move is expected to benefit Pakistani exporters who were previously reliant on transshipment for their products.
Payments for shipments will be made in Chinese currency Yuan, as Russian importers will pay Pakistani exporters in Chinese currency. Chinese and Pakistani banks will be involved in these transactions.
According to the Pakistan Business Council (PBC), bilateral trade between Russia and Pakistan has traditionally favored Russia. In 2020, bilateral trade reached a record high of $757.6 million, with textiles and textile articles accounting for 40.1% of Pakistan’s exports to Russia, and edible fruits comprising another 34%.
Pakistan’s imports from Russia in 2020 amounted to $617 million, including cereals, edible vegetables, mineral fuels, rubber products, paper products, iron and steel, pharmaceutical products, fertilizers, and organic chemicals.
The trade index suggests that Pakistan is better suited to supply the Russian market rather than the other way around, indicating that the Pakistani export industry stands to benefit more from a potential Free Trade Agreement (FTA) between the two countries.
The CEO of Pak Shaheen (Pvt) Limited, Abdullah Farrukh, emphasized that transshipment to the Russian market was time-consuming and benefited other countries involved in the process.
With the new direct shipping route, Pakistani products will reach the Russian market in just 24 days instead of the previous fifty days or more. The Russian market presents significant export potential for Pakistani products, as observed during recent visits to Russia. The direct shipping service is expected to enhance the competitiveness of Pakistani goods in the Russian market.
