EghtesadOnline: An Iranian mission led by Chairman of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei has concluded its visit to Ukraine on Friday.
During the visit, Shafei met with Ukraine’s Vice Prime Minister and Minister of Economic Development and Trade Stepan Kubiv and the two sides stressed the need to boost bilateral economic ties, ICCIMA’s news portal reported.
The Iranian delegation comprised 30 businessmen and representatives from 80 Iranian companies active in the fields of transportation, pharmaceuticals and tourism.
“As the agriculture sector in Iran is suffering from water shortage, cooperation with Ukraine for the production of agro products is attractive for Iran. Negotiations are underway for Iran to use 30,000 hectares of farmland in Ukraine under the ‘extraterritorial farming’ scheme,” Financial Tribune quoted Shafei as saying.
Also known as “agro outsourcing”, the scheme involves the practice of purchasing, renting or leasing by one country of arable land for the cultivation of agricultural products in another country. These products are later imported into the active country, or alternatively exported to other destinations by the same country. This process ensures food security and boosts agricultural production.
Referring to his recent visit to Iran on the occasion of President Hassan Rouhani’s swearing-in ceremony on August 5, Kubiv said, “In our talks with Turkish economy minister in Tehran, we arrived at the conclusion that there is need to form a triangle comprised of Iran, Turkey and Ukraine to boost economic ties.”
Rouhani was reelected as Iran’s president in May. A high-profile swearing-in ceremony was held with 25 delegations from Asia Pacific, 26 from Arab countries and 30 from Europe and Americas in attendance.
The visit coincided with the second Iran Export Fair, otherwise known as IEF 2017, which was held in the Ukrainian capital Kiev on Sept. 12-15.
Tens of Iranian companies showcased their industrial, food, health and construction products in 60 pavilions.
Ukrainian officials, including those from the Ministry of Economic Development and Trade, and the Ukrainian Chamber of Commerce and Industry attended the opening ceremony of the expo and stressed the need for expansion of mutual economic cooperation.
Shafei signed a memorandum of understanding with his Ukrainian counterpart, Gennadiy Chyzhykov, on Monday on the sidelines of the Ukrainian-Iranian Business Forum in Kiev. The MoU stipulates increasing cooperation to boost mutual trade.
The last time an Iranian business delegation traveled to Ukraine dates back to the fiscal 2011-12 when Mohammad Nahavandian (now a deputy for economic affairs) was the head of ICCIMA.
Ukraine, located in East Europe, borders Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldavia. The country has a strategic position since it is located near the Black Sea and the Sea of Azov.
Considering its geopolitical position, Ukraine can be an ideal trade partner for Iran since it can transport goods via air, land or sea.
On the other hand, Ukraine can also help Iranian businessmen undertake trade with other European countries.
Bilateral trade between Ukraine and Iran in 2016 stood at over $745 million.
“Ukrainian exports to Iran increased by 78% during January-May 2017, compared with the same period of last year,” Chyzhykov said during the Monday forum.
In 2016, compared with 2015, exports from Ukraine to Iran increased by 32%, while imports from Iran also increased by 30%,” he was quoted as saying by UkrAgroConsult—a Ukraine-based group consulting/information services in the agricultural and food industries of the Black Sea region.
Chyzhykov stressed that to increase trade between Ukraine and Iran, the two countries should avoid the involvement of third countries in building a chain supply, the group’s website Blackseagrain.com reported.
According to ICCIMA, Iran had a 1.93% share in Ukraine’s foreign trade in 2016.
Ukraine mainly exports agro products such as grains and vegetable oils to Iran, while Iran generally exports petrochemical products, drugs and food products, including processed vegetable, fruits and nuts, to Ukraine.