Trade returns to barter – Kommersant FM

Barter is returning to the Russian economy again: transactions for the exchange of goods in international transactions are increasingly being registered by the Federal Customs Service, Vedomosti writes. The growing popularity of this tool was also confirmed to the publication by the Ministry of Industry and Trade and the Russian Union of Industrialists and Entrepreneurs. Barter transactions imply not only goods, but also services, works, as well as intellectual property, as specified in the clarifications that the service issued specifically for businessmen.

This scheme is not new for Russia; it was widely used in the nineties, economists recall. Barter had to be revived due to difficulties with currency payments between countries, explained Oksana Lukicheva, leading analyst of the macroeconomic analysis department of the Finam company:

“At the moment, the share of barter in economic transactions is growing, and this has been happening from the very beginning of the announcement of sanctions. Somewhere in mid-2022, when they hit us, the first barter transactions that we carried out were, for example, the exchange of Russian fertilizers for Brazilian coffee. The latter then greatly increased in price on the world market, and farmers in Brazil needed a lot of raw materials of Russian origin.

At the same time, every seventh bag of coffee is exchanged through barter, that is, they trade not only with us in this way.

The main reason is difficulties not in determining prices, not in the shortage of goods on the world market, but precisely in difficulties in financial calculations.”

Digital aggregators are now used to find exchange partners. The software is created by the companies participating in the transactions themselves, President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin told Vedomosti. In particular, Indian businessmen are actively developing such platforms.

The authorities rather encourage barter schemes. The Ministry of Finance stated that commodity exchange is better than settlements in unfriendly currencies. But in reality, it is not so easy to find equivalent options for such transactions, noted Oleg Komolov, Candidate of Economic Sciences, Associate Professor at the Financial University under the Government:

“The main problem is that Russia sells natural and energy resources, agricultural raw materials, and in return it, first of all, needs machine tools and equipment. That is, those countries that buy raw materials from us are not always able to supply us with the goods that we need.

Moscow also faced problems in foreign trade relations with India. There they talked about paying for goods in rupees. We sent oil worth $1 billion in Indian currency equivalent, but there is nothing to buy with it, since the country itself is unable to produce the goods that the Russian market needs.

In this case, the situation is getting worse, and only, perhaps, with China can such barter transactions have any prospects, since China produces a fairly wide range of industrial goods.

Some of them can satisfy the demand from Russian consumers as part of such an exchange. But as for trade with other states, with countries of the post-Soviet space, with new friendly ones, such as the United Arab Emirates, Saudi Arabia, with African countries, I do not see much prospects in barter relations.

Rather, this is a forced measure that Russian business takes in trade with the world’s largest industrial centers, such as China, in the first place.”

Now Russian developers are trying to create a special platform for a multilateral chain that will not require cross-border settlements, banking market experts told Vedomosti. We are talking, in particular, about the execution of smart contracts with the introduction of digital and paper bills.

One of the elements that could form the basis of such a concept is the digital ruble. But for now, it is not entirely clear to players what kind of resource this means of payment will have.

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Svetlana Belova