Wheat

Afghanistan Signs Deal With Russia to Import 2 Million Tonnes Wheat

Afghanistan Signs Deal With Russia to Import 2 Million Tonnes Wheat

Taliban, the illicit group on the helm of Afghanistan has signed a provisional deal with Russia to supply gasoline, diesel, gas and wheat to Afghanistan. Afghan Commerce and Industry Ministry was working to diversify its trading partners and Russia had offered the Taliban administration a discount on average global commodity prices. The deal would involve Russia supplying around 1 million tonnes of gasoline, 1 million tonnes of diesel, 500,000 tonnes of liquefied petroleum gas (LPG) and 2 million tonnes of wheat annually.

The move, the first known major international economic deal struck by the Taliban since they returned to power more than a year ago, could help to ease the Islamist movement’s isolation that has effectively cut it off from the global banking system. No country formally recognises the group, which fought a 20-year insurgency against Western forces and their local Afghan allies before sweeping into Kabul as U.S. troops withdrew. Western diplomats have said the group needs to change its course on human rights, particularly those of women, and prove it has cut ties with international militant groups in order to gain formal recognition.

Russia does not officially recognise the Taliban’s government, but Moscow hosted leaders of the movement in the run-up to the fall of Kabul and its embassy is one of only a handful to remain open in the Afghan capital. Russia may start providing trade finance to Wheat Importers – farm minister. Moscow’s special representative for Afghanistan, Zamir Kabulov has confirmed that “preliminary agreements” had been reached on fuel and food supplies to Kabul. The details of pricing and payment methods are still not out but it is clear that Russia had agreed to a discount on global markets on goods that would be delivered to Afghanistan by road and rail.

Economy in Crisis

Since the Taliban regained power, Afghanistan has been plunged into economic crisis after development aid upon which the country relied was cut and amid sanctions that have largely frozen the banking sector. The trade deal is likely to be watched closely in the United States, whose officials have held regular talks with the Taliban on plans for the country’s banking system. Washington has announced the creation of a Swiss trust fund for some of the Afghan central bank reserves held in the United States. The Taliban have demanded the release of the entire amount of around US$7 billion and said the funds should be used for central bank operations.

The Group of Seven (G7) nations are trying to find ways to limit Russia’s oil export earnings in the wake of its invasion of Ukraine in February. Moscow has managed to maintain revenues through increased crude sales to Asia, particularly China and India. The European Union will ban Russian crude imports by Dec. 5 and Russian oil products by Feb. 

Conclusion

Afghanistan has signed a deal with Russia to import 2 million tonnes of wheat, 1 million tonnes of gasoline, 1 million tonnes of diesel, and 500,000 tonnes of liquefied petroleum gas (LPG) on an annual basis. The deal is yet to be made final but the preliminary details show an affirmative outlook. 

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