Islamabad: Pakistan and Russia have signed their first-ever barter trade agreement during the inaugural Pakistan-Russia Trade Forum, as reported by the news agency on October 02.
As per details, the deal is a significant step toward bolstering economic ties, and will see the exchange of agricultural products between the two nations, bypassing traditional payment methods.
Due to payment constraints caused by Western sanctions imposed on Russia following its 2022 invasion of Ukraine, Moscow is increasingly turning to barter deals as a solution. These agreements allow both nations to sidestep currency risks, reduce trade visibility to Western nations, and avoid the complications of international payment systems.
Under the terms of the agreement, Russia’s Astarta-Agrotrading will supply 20,000 tones of chickpeas to Pakistan in exchange for 20,000 tones of rice from Pakistan’s Meskay & Femtee Trading Company. A second deal will involve the trade of 15,000 tones of chickpeas and 10,000 tones of lentils from Russia for 15,000 tones of mandarins and 10,000 tonnes of potatoes from Pakistan.
Both companies have yet to issue official statements regarding the agreements. Speaking at the forum, a Pakistani official emphasised the difficulties both countries face in conducting financial transactions due to the current geopolitical climate. “Russia and Pakistan are facing significant challenges in executing mutual payments,” the official noted. “As a result, these companies have opted to initiate a barter trading mechanism.”
Barter trade has become an increasingly attractive option for Russia, especially in its growing trade relationship with China. Sources have indicated that the first agriculture-related barter deals between Russia and China will be implemented later this year. In February, Russia’s economy ministry issued guidelines for businesses on how to execute barter deals effectively and avoid potential issues. Industry insiders confirmed that barter arrangements between individual companies in Russia and China are already underway.
This landmark agreement marks a pivotal moment in the economic relationship between Pakistan and Russia, signaling new avenues for trade cooperation amid global challenges.
