Aug. 6 (UPI) -- South Korea is moving forward with plans to barter domestic sugar for North Korean alcoholic beverages, according to local press reports.
Seoul's unification ministry said Thursday the Inter-Korean Agricultural Cooperative Federation had signed a contract with North Korea's Kaesong Koryo Ginseng Trading Co. in June. The two sides agreed to the exchange of goods without using money, News 1 reported.
The contract was signed as tensions rose at the border following the demolition of the inter-Korean liaison office. An unnamed Chinese company is to broker the exchange, which includes more than $120,000 worth of North Korean liquor imports: soju, as well as traditional liquor made from wild ginseng and blueberries.
South Korea will export 167 tons of sugar in lieu of cash in order to comply with international sanctions, according to the report.
Approval of the transaction is pending at the unification ministry. An official in Seoul suggested it is highly likely the barter would be authorized, according to local television network SBS.
Newly appointed Unification Minister Lee In-young has placed weight on the need for economic exchange between two Koreas.
"The giving and receiving of [North Korean] water from Mount Kumgang and Paektu, [North Korean] liquor produced by the Taedong River, [in exchange for South Korea's] rice and medicines, may begin on a small scale but could develop into something greater," Lee had said following his appointment.
The North Korean liquor would arrive in the South via a shipping route that extends from the North Korean port of Nampo to Dalian, China. From Dalian, the goods would be delivered to the South Korean port city of Incheon.
Park Jong-pil, vice chairman of the South's Inter-Korean Agricultural Cooperative, said the North Koreans agreed to "sufficiently cooperate" on the deal.
The two Koreas have not exchanged goods since South Korea imposed sanctions on the North's goods in May 2010, following the torpedoing of the South Korean warship Cheonan.