EghtesadOnline: Iran’s imports of consumer and intermediate goods jumped in the last fiscal year (March 2019-20) while the other major import category, i.e. capital goods, declined dramatically compared with the previous year.
The country imported 2.8 million tons of consumer goods worth $7.6 billion in the fiscal 2019-20 to register a 2.33% rise in weight and a 10.54% increase in value year-on-year.
Consumer goods are purchased for consumption. Alternately called final goods, consumer goods are the end result of production and manufacturing, and are what a consumer will see on the store shelf. Clothing, food and jewelry are all examples of consumer goods.
Imports of intermediate goods surged by 19.63% in weight and 9.78% in value last year to stand at 31.65 million tons worth $29.44 billion, Fars News Agency reported.
An intermediate good is utilized to produce a final or finished product. These goods are sold between industries for resale, or for the production of other goods. Examples include steel, wood, glass, gold and silver.
Imports of capital goods into Iran, however, declined by 10.2% in tonnage and 12.92% in value to hover around 484,000 tons worth $5.93 billion.
Capital goods are tangible assets such as buildings, machinery, equipment, vehicles and tools that an organization uses to produce goods or services to produce consumer goods and goods for other businesses.
Overall Imports Rise 1.3% to $43.73b
The country’s overall imports last year stood at 35.36 million tons worth $43.73 billion, indicating a 9% growth in weight and a 1.3% increase in value compared with the preceding year.
China was the main exporter to Iran during the period under review, according to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration.
“The Asian country sold $11.2 billion worth of non-oil goods to Iran last year. The UAE with $8.9 billion, Turkey $4.9 billion, India $3.6 billion and Germany with $2.1 billion worth of exports to Iran were Iran’s other key trading partners in imports," he said.
The imports chiefly included material used in livestock feed, essential goods, medical equipment and pharmaceuticals.
Last year’s imports of livestock feed and essential goods were 3 million tons more compared with the year before, he added.
Meanwhile, exports of non-oil goods stood at $41.3 billion in the last Iranian year.
Oil-based products and by-products as well as petrochemical products are included in IRICA's "non-oil" export data. In fact, petrochemicals and gas condensates constitute the greater share of total exports.
Exports weighed 133.9 million tons—three times as much as the imports in weight and about 13.5% more than the previous year. In terms of value, however, exports show a 7% decline year-on-year, according to the IRICA chief.
“Imports reached 35.3 million tons in the fiscal 2019-20, indicating a 9.3% growth year-on-year. A $2.4 billion trade deficit was registered for the country during the period under review. Raw materials, machinery and intermediate goods accounted for 85% of the imports,” he was quoted as saying by Mehr News Agency.
Essential Goods Take Center Stage
Amid the intensifying unilateral US sanctions, in addition to the detrimental effects of the spread of the new coronavirus on Iran's economy, the trade regime of the country has been geared to importing essential goods to ensure meeting the basic needs of the country.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
A total of 25.09 million tons of essential goods worth close to $15.5 billion were imported into Iran in the last fiscal year to register a 20.77% and 17.13% increase in weight and value respectively, compared with the year before, according to the spokesman of the Islamic Republic of Iran Customs administration, Rouhollah Latifi.
“This amount of essential goods imports accounted for close to 71% and 35% of the volume and value of last year’s total imports respectively,” the official was quoted as saying by ISNA.
“The imported essential commodities included wheat, sugar, corn, rubber, barley, processed tea, rice, different kinds of seeds, red meat, soybeans, pulses, paper, chemical fertilizers and industrial machinery.”
Q1 Imports Fall 26% to $7.6b
Latest data released by IRICA show a total of 8.92 million tons of goods worth $7.62 billion were imported into Iran during the first quarter of the current fiscal year (March 20-June 20), posting a decrease of 26.76% in value and 0.78% in tonnage year-on-year.
Q1 imports of field corn stood at $588 million with a share of 7.72% of overall imports; wheat at $537 million with 7.05%; cellphones at $358 million with 4.7%; semi-milled rice or wholly-milled rice worth $205 million with 2.69% and soybeans at $170 million with a share of 2.23% from total imports.
Top exporters to Iran in Q1 were China with $1.93 billion and a share of 25.4% of Iran’s total imports, the UAE with $1.7 (22.3%), Turkey with $815 million (10.7%), India with $529 (7%) and Russia with $421 million (5.5%).
Imports from China, Turkey and India respectively decreased by 1,834%, 36.1% and 57.8% when compared with last year’s same period while imports from the UAE and Russia improved by 8.5% and 43.22% YOY.
Q1 imports from other countries with a share of 29.1% of Iran’s total exports plunged by 39% YOY to stand at $2.23 billion.
Iran exported over 21.92 million tons of non-oil goods worth $6.36 million during the period to register a decline of 43.98% in value and 45.12% in weight compared with the corresponding period of last year.
The country posted a trade deficit of $1.26 billion over the first quarter of the current year.
Noting that the Covid-19 pandemic disrupted normal economic activity around the world, Mirashrafi said, “The decline in our exports in recent months is to blame on the outbreak of coronavirus and closure of borders. However, exports have begun to get back to normal since mid-June.”