MOSCOW: Two agriculture companies from Russia and Pakistan have signed barter deals to trade chickpeas and lentils from Russia in exchange for rice, mandarins and potatoes, Russia’s TASS news agency reported on Tuesday.

Grappling with payment issues due to Western sanctions over Russia’s invasion of Ukraine in February 2022, Moscow is pursuing barter deals that strip away the need for payment exchange, reduce the visibility Western countries have over its trade flows, and limit currency risk.

Russian firm Astarta-Agrotrading agreed to supply 20,000 tonnes of chickpeas in exchange for 20,000 tonnes of rice from Pakistan’s Meskay & Femtee Trading Company, TASS reported.

Under another contract, Astarta agreed to supply 15,000 tonnes of chickpeas and 10,000 tonnes of lentils for 15,000 tonnes of mandarins and 10,000 tonnes of potatoes.

The two companies did not immediately respond to requests for comment.

“Russia and Pakistan are experiencing specific difficulties in carrying out mutual payments,” TASS quoted a Paki­stani official as saying on the sidelines of a Pakistan-Russia trade forum in Moscow. “Therefore, the two companies decided to launch a barter trade mechanism.”

Payment issues are a particular issue for Russia with China, as bilateral trade soars. Sources told Reuters in August that the first agriculture barter deals between Russia and China would come this autumn. Russia’s economy ministry published a document in February advising Russian companies on how to conduct barter transactions and pointing out pitfalls to avoid.

A source in payment markets told Reuters that barter deals with China were now taking place, but at the level of individual companies.

Published in Dawn, October 2nd, 2024