KARACHI: Pakistan is all set to receive the first container ship directly from Russia next week at the Karachi harbor, paving the way for speedy and direct access for Pakistani exporters to Russian markets, an official of a shipping agency confirmed on Friday.

The direct service will start between the port city of Karachi and Russia’s Saint Petersburg from May 25, mainly for the export of Pakistani products.

The development comes as cash-strapped Pakistan is desperately looking to increase its exports and bolster trade relations with other countries to shore up its depleting foreign exchange reserves, which have fallen to critically low levels over the last few months. The country has been waiting for the approval of a bailout program from the International Monetary Fund (IMF) to stave off the possibility of default but has so far been unsuccessful in finalizing an agreement with the global lender.

Earlier this year, Pakistan also signed a deal with Russia to purchase crude oil and oil products at a cheaper rate and is awaiting the first shipment.

“The container ship, Necoline, will berth on May 25 at the Karachi Port and will depart on the same day,” Abdullah Farrukh, CEO of the shipping agency Pak Shaheen Private Limited, told Arab News. “This is a significant development in the history of Pakistan that a Russian ship is coming to the country that will load Pakistani products and directly supply them to the Russian market for the first time.”

Farrukh said the direct service will operate on a monthly basis before its frequency is increased from August this year, keeping in view the expected surge in trade flow between the two countries.

He added the direct service would also reduce the delivery time to 19 days as compared to the usual 50 days that it took previously.

“With the commencement of direct service, the Karachi Port will be transformed into a transshipment hub and cargoes from another neighboring country would be transported via Karachi,” he added. “Cargo from China, India, Malaysia, and other regional countries would be transshipped from Karachi to Russia.”

Responding to a question about the mode of payment, Farrukh said the payment would be made in Chinese Yuan because Russian importers are willing to pay in Yuan and the transactions would be facilitated by both Chinese and Pakistani banks.

The Pakistani embassy in Russia announced in a statement on Friday that Moscow signed a protocol related to customs cooperation with Pakistan’s commerce ministry.

It said the protocol that covered administrative cooperation and information exchange under the unified tariff preferences of Eurasian Economic Union was “another important step in building the legal framework required for developing commercial relations” between the two countries.

Aasim Azim Siddiqui, chairman of All Pakistan Shipping Association, said the initiation of direct service would not only cut the delivery time but also help reduce shipping costs.

“In the absence of direct service between Pakistan and Russia, the transportation of goods via other ports was not only time-consuming but also costly,” he said. “This initiative would not only cut the number of days but also reduce costs or at least make it market competitive.”

Pakistani shippers said the opening of a direct shipping line would help Pakistani exporters supply textiles and sports goods, and commodities such as rice, various leather products, and fruits and vegetable, among others things, to Russia at competitive rates.

The South Asian country during the first 10 months of the current fiscal year has received $77.8 million on account of export receipts from Russia as compared to the $119.6 million received during the same period last year, according to the State Bank of Pakistan (SBP).

Meanwhile, Pakistan made payments of $522.9 million on account of imports as compared to $213.9 million in the same period last year.