An official said that a direct containerized shipping service between Karachi and Saint Petersburg will commence this month, giving Pakistani products access to the Russian market.
“The first ever ship will call on May 25, 2023, at Karachi Port,” stated Abdullah Farrukh, Chief Executive Officer (CEO) of Pak Shaheen (Pvt) Limited and Convener Shipping Affairs, Federation of Pakistan Chamber of Commerce and Industry (FPCCI).
Prior to the launch of the service, Pakistani products were being transshipped to the Russian market, which caused delays and increased freight expenses.
According to Abdullah, direct shipping will make it easier for Pakistan to export textiles, sports products, surgical items, Himalayan salt, grains, leather goods, gloves, clothes, fruits and vegetables, and confectionery items to Russia.
The service will run between Karachi and Saint Petersburg, according to the CEO of Pak Shaheen.
“It is a significant step in the country’s current economic situation and will help Pakistani exporters who were previously sending their products through transshipment,” he added.
In terms of payment, the CEO stated that exports will be paid for in Chinese currency Yuan, while Russian importers would pay Pakistani exporters in Chinese currency. He stated that these transactions would include Chinese and Pakistani banks.
According to Pakistan Business Council (PBC) research, bilateral commerce between Russia and Pakistan has historically favored Russia. Bilateral trade hit an all-time high of $757.6 million in 2020. Textiles and associated goods accounted for 40.1% of Pakistan’s exports to Russia in 2020.
Similarly, edible fruits contributed to 34% of Pakistan’s Russian exports.
Pakistan’s imports from Russia in 2020 totaled $617 million, with cereals, edible vegetables, mineral fuels, rubber products, paper products, iron and steel, pharmaceutical products, fertilizers, and organic chemicals accounting for the majority of the total.
In 2020, Pakistan’s exports to Russia were valued at $145 million, with the main export commodities 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.
According to the trade index, Pakistan is more positioned to supply the Russian market than Russia is to serve the Pakistani market. This demonstrates that a hypothetical FTA between the two nations will benefit Pakistan’s export industry more.
According to Abdullah, the transshipment of Pakistani items to the Russian market takes a long time and benefits other countries via whom these products are transshipped. Pakistani fruits had previously taken more than 50 days to reach the Russian market via other nations; but, with the direct route, these shipments would now arrive in only 24 days.
He stated that the Russian market is vast and offers significant export potential for Pakistani items and that during his recent visit, he observed significant demand for Pakistani products that were arriving in Russia via other nations.
He claims that direct shipping services will increase the competitiveness of Pakistani items in the Russian market.
