Asian countries cut container trade with Russia amid Ukraine invasion
Export-import trade between Russia and many countries in Asia has already been halted following Moscow’s last week’s invasion of Kyiv which raised severe concern mainly to exporting nations on the possibility of their significant revenue loss.
Especially the imposition of various economic and political sanctions on Russia by the western countries further deepened their worries as uncertainty created about getting payment from Russia as the invader’s banks are set to be deterred from the banking system all over the world due to the sanctions.
Shipping sector officials fear a possible rise in container freight rates in the coming days and weeks as the fuel oil price is rising worldwide following the war.
Bangladesh’s trade with Russia and Ukraine has already started to feel the pinch of the ongoing war. Bangladesh and Russia have two-way trades worth nearly US$1 billion while with Ukraine the trade amounts to around US$350 million.
Shipping companies have already stopped the acceptance of new bookings towards Russia and Ukrainian ports from Bangladesh.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the apex apparel body, advised its members not to make apparel shipments to Russia at this moment taking into consideration various financial and political sanctions imposed by western nations.
Additionally, several shipping agents have stopped sending cargoes towards Russia and Ukraine, although containers were ready for shipment.
Mohammad Ajmir Hossain Chowdhury, deputy general manager at MSC Bangladesh, said some containers were stuffed with apparel items but he did not send those as the war began.
He noted that exporters apprehending complications over getting payment as various sanctions are being slapped on Russia, thus they are also pursuing wait and see policy in making new bookings.
Mohammed Abdullah Jahir, chief operating officer at Saif Maritime Limited, believes that as oil prices are rising due to the war, box freight rates may go up this month. “Bangladesh’s export and import trade will be affected significantly if the war prolongs,” he said.
Thailand has over US$3 billion in trade with Russia and Ukraine which now become suspended due to the ongoing conflict. Thailand has tasked its fiscal policy office to assess the situation and predict the possible impacts of the war on its economy and trade.
Russia and Ukraine are important sources of import and export for debt-ridden Sri Lanka. The ongoing war has led suspension of both export and import to and from the two countries further deepening the foreign currency reserve situation of the island nation.
Banks in Singapore have halted trade financing for Russian raw materials amid the war, virtually suspending shipment between the two countries. In 2019 Russia exported goods worth US$2.55 billion to Singapore while imports amounted to US$624 million, which now become uncertain.
Japan and South Korea
Furthermore, Japan and South Korea joined the rally and banned export and import to Russia halting shipment to the country that invaded Ukraine last week. The Japanese giant Honda has also announced the suspension of automobile and motorcycle exports to Russia.