A 22 members Agro Food Products trade delegation of Trade Development Authority left Pakistan led by Business Leader of the Business Community of Pakistan and Chief Executive of TDAP Mr S.M. Muneer for Russia on 13/09/2015. The delegation was organised as a result of instructions of the Finance Minister in the situation when Russian Federation had imposed a ban on import of food items from European Union and the USA. Delegation was comprised of the Chairman Pak Russia Business Council FPCCI Mr Muhammad Farooq Afzal, Chairman Pakistan Fruits and Vegetables Association Mr Waheed Ahmed, Chairman Federal B Area Association of Trade & Industry Mr Javed Ghori and exporters of Agro Food Products.
Russia is one of the world's largest markets for agricultural and food products and stands the fifth largest importer after EU, US, China and Japan. It has market size of $45B of Food Products. Russia imports almost 70% fresh fruits of their total consumption. The European Union exported approximately 32% fruits to Russian Federation from their total fruit exports in 2013 which is currently banned by Russian Federation. This has created gap if about $10B's worth of goods and is the best time for Pakistan to offer its partnership for the supply of food products.
As Russia is the land of opportunities for fresh produce & food products so Pakistan is targeting this market by approaching all modern marketing tactics including the Government to Government level talks with Russian Federation for bilateral trade, enhancing business co-operation and demolishing business barrier.
Meeting with Plenipotentiary Representative of the Republic of Bashkortostan at Presidency of Russian Federation
The meeting with the Representatives of the Republic of Bashkortostan was held at the Representative office in Moscow. Republic of Bashkortostan is one of the six Muslim Republics and the richest territory of Russia in mineral resources. A documentary was shown to delegates on the Republic of Bashkortostan. The Republic has the largest petrochemical industries and 40% of the area of the Republic consists on forests. The Republic imports cotton, rice and fruit. CE TDAP Mr Muneer emphasised on co-operation between the businessmen of Pakistan and the Republic of the Bashkortostan and assured the hosts that in future a special delegation will be sent for the Republic of Bashkortostan and also similarly invited the trade delegation of the businessmen from the Republic of Bashkortostan. He also briefed regarding textile industry of Pakistan and investment policy in Pakistan.
Meeting with Federal Customs Service of the Russian Federation in Moscow In the meeting with the Deputy Head of Customs Co-operation Department Mr Vitaly Peskov, Pakistani delegation informed the Federal Customs Services that the duty on Pakistani Kinnow has arbitrarily been increased by the Federal Customs Services from US $650/- to US $1050/- per ton. Similarly, the issue of customs duty on textile items was also discussed. The Russian side was informed that instead of invoice value, the Federal Customs Services considers weight of textile items for calculation of duties which makes Pakistani products very expensive. The Federal Customs Services representatives pointed out that the value declared by the exporters of the Egypt and Turkey is higher than the value declared by Pakistani exporters. The Deputy Head was informed that the labor cost and production cost in Pakistan is cheaper as compared to Turkey and Egypt so the Pakistani exporters declare less value. It was pointed out by the Federal Customs Services of Russia that there is no protocol signed by the Russia Federation and Pakistan and it results evaluation of Pakistani products at higher rate. He said that if there is a protocol signed, the duty structure will be amended as per protocol.
Visit of World Food Moscow Exhibition and B2B Meetings at the premises of the World Food Moscow Exhibition
The delegation also visited World Food Moscow (14-17 September, 2015) where 12 Pakistani companies of Agro Food Products exhibited. These companies displayed their products ie Rice, Fruits, Vegetables, Confectionary, Tea meat and Salt. The CE TDAP met with every exhibitor individually in three different halls. The exhibitors were very happy on the construction of good quality customised stalls of Pakistan.
Panel Discussion by Working Group of State Duma and Rosselkhoznadzor
At the premises of World Food Moscow, the delegation participated in a panel discussion on "Practical Recommendations of Rosselkhoznadzor of the Russian Federation and Retail Chains" for countries which have yet started supplying to Russia. Topics of discussion were a) State control of quality b) Requirements Phytosanitary inspections c) Settlement system d) Calculations in national currencies. Dr Qurban Ali, Commissioner Animal Husbandry briefed regarding potential of meat export from Pakistan and state of animal health in Pakistan. The working Group of State Duma and Quarantine Department (Rosselkhoznadzor) showed special interest in the meat import from Pakistan. The CE TDAP Mr Muneer invited the officials of Quarantine Department (Rosselkhoznadzor) for the inspection of abattoirs so that Pakistani meat may be exported to the Russian Federation, which was accepted and hopefully will visit Pakistan by the end of October or early November 2015.
Meeting with Senior Officials of Ministry of Economic Development of the Russian Federation In the meeting, it was highlighted that the Pakistani exporters are not fairly treated as other countries. Mr Waheed Chairman PFVA informed that Pakistani Potato exporters are charged $620 / ton whereas Egypt is charged $400 to 410 / ton. He informed that Pakistan can double its export if fair tariff is charged to Pakistani exporters. Mr Farooq Afzal Chairman Pak Russia Business Council informed that Pakistani jeans and knitted garments are charged 100% duty which makes the products non-competitive. The Russian side was asked to give level playing field to Pakistan so that Pakistan may increase its export to Russia and the Russians may get cheap products. The Chief Executive showed his willingness to facilitate Russian exports to Pakistan. The meeting with senior officials was very positive and the officials of the Russian Federation informed regarding their visit to Pakistan for Inter-Ministerial Meeting.
The delegation as a result of meetings decided that the issue of higher tariffs on Pakistani exporters will be taken up in the Inter Ministerial Governmental Commission Meeting to be held at Islamabad on 20th and 21st November, 2015. TDAP will also emphasise for the protocol signing between the two countries. It may be noted that the issues of bilateral importance are discussed in inter-Ministerial meetings.
Meeting with Russian Federation Chamber of Commerce and Industry, Moscow The Vice-President of the Russian Federation Chamber of Commerce & Industry Mr GEORGY PETROV along with the high ups of the RFCCI met with the visiting Pakistani Trade Delegation.
Describing the current level of mutual turnover between Pakistan and Russia, Mr Georgy Petrov noted that, in 2014, it reached 457.6 million dollars. The main export items were food products and agricultural raw materials, timber, pulp, paper and metal products. Russian imports were textiles, footwear, agricultural and food products. He further said that Pakistan's share in Russia's import does not exceed 0.06 percent, and investment co-operation between the two countries is almost none. In addition to that the trade is unstable and prone to crises in the world economy and the effects of internal problems. The Vice President of Russian Chamber of Commerce believes that the modest rates of bilateral trade and economic co-operation is low due to a number of factors, including weak contacts between entrepreneurs of the two countries and their lack of awareness about opportunities in the markets of Russia and Pakistan. Vice-President RFCCI expressed hope for further expansion of Russian-Pakistani mutually beneficial business co-operation and suggested investment and industrial co-operation between the two countries. He emphasised for exchange of information. He was optimistic that textile imports from Pakistan would increase as Pakistan strong in cotton.
Acting President of Russian Business Council for Co-operation with Pakistan SERGEY VASELIEV said that the investment co-operation would have a more balanced and sustainable bilateral trading and economic relations between two counties. In his view, there are good prospects in the energy and industrial supply and various mechanical and electrical products to Pakistan. Dr ZAHID A. KHAN informed about ongoing implementation of program of organising a Single Country Exhibition of Russian companies in Pakistan in March 2016 in Collaboration with PRBC of FPCCI, and program of founding the Trading House of Pakistan in Moscow.
The head of the Pakistani delegation Mr S. M. MUNEER, thanked for the invitation to visit Russia and the warm reception given to them. He said that the Russian-Pakistani trade and economic relations are rapidly growing, but not yet fully implemented and have a potential for further growth and development of mutually beneficial partnership. The leader of Pakistani delegation Mr S. M. Muneer, emphasised that the Pakistan is interested in Russian investment and further co-operation in the leading sectors of the economy, as well as in the supply of Russian engineering products, in particular for agricultural purposes. At the same time, Pakistan has great potential for the supply of agricultural products and livestock for the Russian market. CE, TDAP stated that TDAP will facilitate the Russian buyers. He further said that the locus of international trade is shifting away from the western countries. Pakistan is also following the global trade scenario and diversifying its global trade. He said that there is huge potential to penetrate in the Russian markets. The objective of his visit is to increase the trade relations and to increase trade volumes from some million dollars to billions of dollar.
Mr FAROOQ AFZAL Chairman Pak Russia Business Council FPCCI, also expressed his views and said that we have to activate the activities of both the Business Councils of Russia and Pakistan, and the Executives of Business Councils have to meet every six months either in Pakistan or in Russia. He further said that it is necessary to have frequent exchange of trade delegations of Chamber of Commerce & Industry of both the countries.
Meeting with Certification Group, Moscow A meeting was held with Mr Alexander N. Belikov, Commercial Director of Certification Group. He informed that the Certification Group prepares the local and international companies for registration in Russia. The Certification Group also helps in clearing of goods from customs, logistics and insurance. The Group is accredited by international organisations. It may be noted that the agro food products of other countries need registration in Russia and Certification Group can ensure it within three months and one year for herbal products.
Mr Farooq Afzal, Chairman Pakistan Russia Business Council gave presentation on Pakistan and requested the Certification Group for emailing the presentation in English instead of Russian. He also requested for rates / charges in case Pakistani companies need support of the Certification Group.
Meeting with X5 Retail Group (the leader among Russian Food Chains) A meeting was arranged of Pakistani exporters with X5 Retail Group which have 2,545 stores and 109,000 employees (2nd largest retailer in Russia). The Pakistani exporters met with Directors and Supply Managers of X5 and introduced their products and exchanged views on supply of products to X5 Retail Group.
Meeting with Deputy Prime Minister of Tatarsatan and other senior officials of the Republic The trade delegation of Pakistan met with Deputy Prime Minister Mr Ravil K. Akhmetshin of the Republic of Tatarastan. Tatarastan has a land area of 68,000 sq. km and it is in the center of Russia. The detailed presentations were given to Pakistan delegation on trade, economy, economic zone etc. It was informed that Tatarstan is a historic and dynamic region. Kazan, the capital of Tatarastan, is known as third city of Russia. There are helicopter and Mercedes plants in Tatarastan. The Pakistani exporters were invited for investment in Alabuga which has been declared tax free zone. There were suggestions from the Side of Tatarastan for a) Tatarastan Pakistan Trade Fairs b) Cultural Exchanges and c) Film Festivals. Tatarastan showed interest in textile industry of Pakistan and oil export to Pakistan.
The CE TDAP Mr Muneer briefed regarding Pakistan and informed that Pakistan is very big importer of fertiliser. He emphasised on business relations and informed that Pakistan purchased military helicopters from Russia. Both the Muslim Republics of Russian Federation (Bashkortostan and Tatarstan) showed great interest in trade with Pakistan. The Republics have strong industrial base but they have shortage of rice, cotton, potato and mandarin. The Head of both the Republics not only gave detailed presentation on trade and economy but also showed interest on Single Country Exhibition by Pakistan in their region and their region exporters' fairs in Pakistan. The CE TDAP Mr S.M. Muneer was invited with a visit of trade delegation to UFA and Kazan.
Meeting with Federal Customs Officials at Saint PetersburgA meeting was held with Mr Andrey Chulkov, Head of Federal Customs Revenue Division of North West Customs Administration. It was informed that the turnover of trade between Russia and Pakistan has decreased due to decrease of exports of Russia to Pakistan. It was informed that out of 196 trade partners of Russia, Pakistan is on 52nd position and its exports to Russia are increasing due to sanctions.
The CE TDAP briefed Russian Customs officers that he is chief of the organisation which is bridge between private sector and the government. He informed that he had led a delegation of Pakistani businessmen after the Prime Minister Nawaz Sharif and President Putin had meeting in Ufa and both the leaders desired to increase trade. The Chief Executive informed the Russian Customs officials that the production cost of Pakistani products is low but the duties by the Russian Customs are very high, which is one of the hindrances in increase in exports to Russia. The Chief Executive invited the delegation of Federal Customs Service so that they themselves visit and see the production cost. Mr Waheed Ahmed, Chairman, Pakistan Fruit and Vegetable Exporters Association informed that the production cost of Pakistani Kinnow was 70 cents per Kg whereas tariff was 90 cents per Kg which has further been revised after January/ December, 2015 to $1.5 per Kg. Similarly, Mr Farooq Afzal Chairman Pak Russian Business Council FPCCI briefed on custom valuation problems for jeans and knitted garments.
He further informed that the minutes of meeting will be sent to Federal Customs office and if they permit the delegation can be sent to see the facilities in Pakistan for Production cost.
Meeting with Leningrad Region Chamber of Commerce and signing of Agreement of Co-operation by the FPCCI with the LRCCI, Saint Petersburg Ms Alexandra Sadkovskaya, Vice President Leningrad Region Chamber of Commerce & Industry chaired the meeting on behalf of the LCCI whereas Mr S.M. Muneer chaired on behalf of Pakistan. Ms Alexandra Sadkovskaya, Vice President Leningrad Region Chamber of Commerce & Industry said that trade with Pakistan is only 0.5% of total trade of Russia. She said that the B2B meetings of Russian buyers with Pakistan trade delegation will help to develop the trade. The CE TDAP Mr Muneer praised Leningrad region on its role in World War II. He informed the chamber representatives regarding his very positive meetings in Russia and invited the Russian buyers during textile exhibition and Expo Pakistan.
An Agreement of Co-operation was signed between FPCCI and Leningrad Region Chamber of Commerce and Industry for broadening and deepening of economic ties, identifying areas of co-operation on trade and investment. On behalf of the FPCCI, Mr Farooq Afzal, Chairman, Pakistan Russia Business Council and on behalf LRCCI Ms Liliia Arakelova, Head Foreign Economic Relations signed the Agreement.
After the signing ceremony, the Business meetings of Pakistani Exporters with their Russian buyers were arranged by the Leningrad Chamber of Commerce and Industry. Meeting with Vice Governor of Saint Petersburg Mr Sergey N. Movchan In the meeting with Vice Governor, the representative of Ministry of Foreign Affairs, President Saint Petersburg Chamber of Commerce & Industry, Deputy Chairman of Industry & Innovation and Chairman for Development of Entrepreneurship were present. The Vice Governor of Saint Petersburg welcomed the delegation to city of traditions of Europe and Asia. The Vice Governor informed that they are signing the agreement of co-operation with Province of Sindh. The Governor of Saint Petersburg will visit Karachi to sign it. The Vice Governor informed that they want good relations with Asian Countries especially with Islamic Republic of Pakistan.
The Chief Executive TDAP M. S.M. Muneer briefed regarding Pakistan and its products. He informed that top exporters of meat, mango, rice, leather etc are visiting with the trade delegation. He informed that the delegation is visiting Russia on the instructions of the Prime Minister of Pakistan who wants more trade with Russia. The CE TDAP suggested 1) opening of Pakistani bank in Russia and Russian bank in Pakistan 2)Visa to businessmen should be on priority basis 3) Preferential trade agreement between Pakistan and Russia 4) Investment by Russia in industrial zones 5) Visit of trade delegation under the leadership of Governor / Vice Governor.
The Vice Governor suggested that a small working group may be made to make a road map and implementation plan. He suggested identification of products and making of price policy for trade with Pakistan. The Vice Governor appreciated high quality textile products, leather products and surgical items. The Vice Governor suggested investment by Pakistani exporters in three economic zones. The Vice Governor appreciated the interesting idea of opening the bank branches. The Vice Governor suggested the representative of Ministry of Foreign Affairs to bring it to the notice of Federal Government that without visa it is not possible to cooperate. The President of Saint Petersburg Chamber of Commerce & Industry informed that he already knew Mr S. M. Muneer as President of India Pakistan Chamber of Commerce & Industry. He offered his support in customs in case if there is problem. He also offered his support in registration, visa facilitation and bank opening in Saint Petersburg. Mr Qurban Ali also briefed on potential of meat export to Russia. He informed the meeting that Pakistan is already exporting meat to European Union.
Mr Farooq Afzal Chairman Pak Russia Business Council informed the Vice Governor and his Colleagues about the Single Country exhibition of Russian companies in Pakistan for which Vice Governor and others appreciated the idea and agreed to cooperate for the same by all means. It is hoped that the visit of trade delegation will further pave the way in the promotion of bilateral trade between the two counties.
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