Russia’s war in Ukraine continues, but so does its trade with some of the world’s most important economies, including India, where it is looking to expand its coal exports.
Elsewhere in this round-up of trade news from the nation, some within the EU are seeking to put new restrictions on re-export to Russia through European firms’ overseas subsidiaries, while existing sanctions are forcing the country to resort to barter in its trade with Pakistan.
New restrictions
Foreign subsidiaries of European firms could face new restrictions on their trade with Russia, according to the FT.
EU sanctions envoy David O’Sullivan told the publication:
“A lot of the product going through China [to Russia] is coming from subsidiaries of western companies in south-east Asia. We are focusing our efforts more on trying to stop the transshipment from there through to China.”
He added that a discussion was held on the possible restriction of re-export for subsidiaries between the EU’s economy and financial services commissioners Valdis Dombrovskis and Mairead McGuinness last week.
However, he said, there had been “some resistance” from business, and there are also concerns that it could impact the economies of third countries who have not signed up to restrictions on trade with Russia.
Kyiv School of Economics Institute sanctions expert Olena Bilousova told the FT that “stronger regulations for subsidiaries are crucial, but should also be paired with monitoring and holding companies to account for negligence”.
India’s rising coal exports
India could be set to import greater volumes of Russian coal as China’s demand takes a hit from plans to cut back on the power source, Reuters reports.
Deputy Russian prime minister Alexander Novak recently told reporters that “Russian coal-producing enterprises have significant resources and are interested in expanding its presence in the fast-growing Indian market”.
India’s demand for power is at an all-time high as its economy continues to grow, while the growth in its use of coal-based power this year outstripped that of its renewable energy for the first time since 2019.
Citrics for lentils
Russia is reportedly accepting bartered food in its trade with Pakistan, owing to Western sanctions that have impacted its ability to pay, according to independent Russian newspaper the Moscow Times.
It is the first ever barter deal between the two countries and came as part of the Pakistan-Russia Trade and Investment Forum held this month in Moscow. Astarta-Agrotrading, a Russian food company, will offer chickpeas and lentils to Pakistan, while Pakistan will provide mandarins and rice in return.
Pakistan's deputy commerce minister, Nasir Hamid, said that system was required due to “difficulties with mutual payments”.
It follows reports by Reuters in August that Russia was also seeking to expand barter trade with China as a means of circumventing restrictions on its ability to pay for goods and services.
The barter system is also viewed as a way to avoid scrutiny from Western monitoring organisations. The Reuters report noted that Moscow is developing regulations for barter trade, and that Russian officials believe China is doing the same.
Fight or flight
The owners of a host of planes trapped in Russia following the imposition of sanctions are challenging the decision in the Royal Courts of Justice in what has been described as a ‘mega-trial’.
Plane owners are bringing claims against insurers, including AIG and Lloyd’s of London, in a lengthy trial that is expected to last until Christmas.
The FT reports that world’s largest leaser of commercial aircraft, AerCap, is among those suing the insurance groups for a combined US$3bn over 500 aircraft worth around $10bn.
It could amount to the largest loss in the history of the aviation insurance sector, beating the sum paid out following the terrorist attacks on 9/11.
Commercial barristers are expected to suggest that the payout should not be secured on the basis that the aircraft could be recovered, depending on the resolution of the war and even the outcome of the upcoming US presidential election.
Baltic Sea expansion
Russia is planning expansions to its ports on the Baltic Sea in a bid to grow its agricultural exports, according to Reuters.
The use of Black Sea ports, which have sustained the country’s grain exports for decades, is threatened by the war in Ukraine.
Now, the Russian government has set a target to expand agricultural exports by 50% by 2030, and is looking to expand into new markets in Latin America and Africa to diversify its exports in the sector.
Russia is the world’s largest exporter of wheat, corn, peas and barley, but the expansion of Baltic terminals is also “a question of economic and transport security and sovereignty”, according to Russian shipping firm Novotrans.
This year, Baltic ports loaded only 2.4% of overall Russian grain exports, though this was still a threefold increase on the previous year.
Daryna Snitko, the vice president of Gazprombank, one of Russia’s main lenders to farmers, said that “logistically, the Baltic has many advantages for grains exports”.