Iran's Non-Oil Trade With EU Tops $8.5 Billion in 10 Months
EghtesadOnline: Iran traded 6.73 million tons of non-oil commodities worth $8.57 billion with member states of the European Union during the first 10 months of the current fiscal year (March 21, 2018-Jan. 20) to register a 15.52% and 18.76% decline in tonnage and value respectively compared with last year’s corresponding period.
Latest data released by the Islamic Republic of Iran Customs Administration show Iran’s exports totaled 1.05 million tons worth $900.67 million during the period, indicating a 18.36% and 27.33% decline in tonnage and value respectively year-on-year.
Imports stood at 5.68 million tons worth $7.66 billion, down 14.97% and 17.62% in tonnage and value respectively YOY, Financial Tribune reported.
The European Union is a political and economic union of 28 member states located primarily in Europe.
Main Commodities, Trading Partners
Iran mainly exported non-alloy iron/steel, floorings, pistachio, urea and saffron to EU member states.
In exchange, major commodities imported into Iran from EU states included soybean, field corn, auto parts, oilcake, pharmaceutical supplements and barley.
In terms of total trade value, Germany topped the list among EU states with bilateral trade with Iran standing at 703,103 tons worth $2.22 billion, down by 7.53% and 16.46% in tonnage and value respectively YOY.
Exports to Germany amounted to 104,564 tons worth $214.71 million to register a 165% growth in tonnage and 23.76% decrease in value YOY.
Germany was Iran’s second biggest export destination among the countries under review and 19th in the world.
In return, Germany exported 596,987 tons of commodities worth $2.01 billion to Iran, down by 17.38% and 15.92% in tonnage and value respectively YOY.
Germany was the top exporter of goods to Iran among the EU states and fourth in the world.
Major Iranian commodities exported to Germany were floorings, pistachio, offal and polystyrene. This is while Germany mainly exported antiserum, machinery, pharmaceutical supplements, graphic electrodes used in furnaces and barley to Iran.
Italy was Iran’s second biggest trading partner among EU states during the 10 months, as two-way commercial exchanges stood at 559,423 tons worth $1.18 billion to register a 23.57% and 21.18% decline in tonnage and value respectively YOY.
Iran exported 430,531 tons of goods worth $228.01 million to Italy, down by 23.17% and 26.93% in tonnage and value respectively YOY.
Italy was Iran’s top export destination among EU countries and 15th in the world during the period.
Iran’s exports to Italy included non-alloy iron/steel, methanol, non-alloy iron/steel ingots and semi-finished non-alloy iron/steel products.
Iran imported 128,892 tons of commodities worth $954.66 million from Italy, down 24.78% and 20.15% in tonnage and value respectively YOY, a majority of which were air compressor screw, industrial furnace parts and baking machinery.
Italy was the second exporter of goods to Iran among EU states and ninth exporter to Iran in the world.
France was Iran’s third major trading partner among the states.
Mutual trade between Iran and France amounted to 115,121 tons worth $974.84 million, indicating a 41.21% and 33.77% decline in tonnage and value respectively YOY.
Iran’s exports reached 40,301 tons worth $24.54 million, down 9.56% and 28.25% in tonnage and value respectively YOY, while France’s exports to Iran were at 74,838 tons worth $950.89 million, down by 38.25% and 34.05% in tonnage and value respectively YOY.
France was Iran’s tenth export destination as well as the third exporter of goods to Iran among EU states. Moreover, the country was Iran’s 52nd export destination and tenth exporter to Iran in the world.
Urea, pistachio, saffron and vehicle parts were Iran’s main goods exported to France, while France exported mainly auto parts, transmission devices and pharmaceuticals.
Spain was Iran’s third biggest export destination, after Italy and Germany, among EU states and 30th in the world, as Iran exported 35,613 tons worth $93.66 million to Spain during the 10-month period, down by 72.88% and 28.48% in tonnage and value respectively YOY.
Iran mainly exported saffron and pistachios to Spain.
Highest Growths, Declines in Trade
Trade with Austria (at $424.3 million), Cyprus (at $39.82 million) and Finland (at $116.9 million) saw the highest YOY growths of 41.83%, 40.22% 38.67% respectively, while trade with Lithuania (at $3.26 million), Croatia (at $2.22 million) and Sweden (at $322.08 million) witnessed the lowest declines of 72.5%, 43.88% and 42.52% respectively.
Iran’s exports to Croatia (at $1.42 million), Hungary (at $3.85 million) and Bulgaria (at $53.23 million) saw the highest growths of 274%, 62.15% and 52.64% respectively, while exports to Luxemburg (at $6,289), Lithuania (at $1.75 million) and Latvia (at $113,124) witnessed the highest decline of 92.18%, 77.12% and 63.31% respectively.
Imports from Austria (at $407.22 million), Cyprus (at $38.33 million) and Finland (at $116.32 million) saw the highest growth of 47.3%, 41.23% and 37.8% respectively, while imports from Lithuania (at $1.5 million), Romania (at $24.16 million) and Bulgaria (at $10.92 million) witnessed the highest decline of 64.6%, 53.77% and 47.38% respectively.
The above data have been derived from the Islamic Republic of Iran Customs Administration's report and only include non-oil commodities.
A more comprehensive report is often published by Eurostat in Europe, which covers the entire list of goods exchanges.
The Eurostat report is published on a monthly basis. However, the report detailing two-way trade for the entire 2018 has been delayed due to technicalities.
Financial Tribune will publish the European data as soon as the problem is solved.
Special Trade Channel in the Making
Iran-EU trade began to increase following the signing of the nuclear agreement between Tehran and world powers in 2015 and its implementation in early 2016.
The nuclear deal, better known as Joint Comprehensive Plan of Action, saw years of international sanctions against the Islamic Republic lifted. In exchange, the country agreed to limit the scope of its nuclear program.
However, the United States under the presidency of Donald Trump, decided to unilaterally pull out of JCPOA in May last year. What ensued in the following months were the reimposition of "toughest sanctions ever", as Washington branded them.
The renewed sanctions have effectively restricted Iran's trade with the world.
Meanwhile, Iran and the EU are working to operationalize a special channel for trading commodities (mainly oil from Iran in exchange for essential goods from the EU) despite US sanctions.
Last month, Germany, France and Britain launched a mechanism to continue the flow of goods they believe is central to keeping JCPOA alive.
The Europeans conceived ISTEX, a payment system, to conduct non-dollar trade with Iran and circumvent US sanctions against banks and businesses doing business with the Islamic Republic, according to a report by NDR, a German public channel.
According to German-language business newspaper Handelsblatt, INSTEX, which stands for Instrument in Support of Trade Exchanges, is the system that analysts have been expecting. It is basically a barter system that tallies exports of Iranian oil against goods from Europe, thus avoiding exposure to the dollar, which is at the heart of sanctions against Iran. Importantly, the vehicle only allows agricultural and humanitarian goods, medicines and medical devices.
That in itself isn't much, according to Sascha Lohmann, an expert on US foreign policy at SWP, a Berlin think tank. He stressed that it's important for the EU and European unity.
“It also sends a signal to Iranians that the EU is still engaged,” Lohmann said. “Trump will probably be angry; it’s going to be interesting to see how he responds.”