EghtesadOnline: The Organization for Islamic Cooperation was the biggest destination of Iranian exports in the last fiscal year (March 2019-20) among global economic organizations.
Iran exported 76.89 million tons of non-oil goods worth $24.66 billion to OIC member states during the period, which shows a 25% and 0.9% rise in tonnage and value respectively compared with the previous year.
OIC is an international organization founded in 1969, consisting of 57 member states, including Iran, with 47 countries being Muslim majority countries. Some, especially in West Africa—though with large Muslim populations, are not necessarily Muslim majority countries. The organization claims to be the collective voice of Muslim world and works to protect their interests in the spirit of promoting international peace and harmony.
Trade With ECO, (P)GCC
Non-oil exports to Economic Cooperation Organization over the same period stood at 29.94 million tons worth $9.7 billion, indicating a 67% and 24.5% increase in tonnage and value respectively year-on-year, Fars News Agency reported.
ECO is a Eurasian political and economic intergovernmental organization founded in 1984 in Tehran by the leaders of Iran, Pakistan and Turkey. It provides a platform to discuss ways of improving development, trade and investment opportunities.
It is an ad hoc organization under the United Nations Charter. The objective is to establish a single market for goods and services, much like the European Union.
ECO's secretariat and cultural department are located in Iran, its economic bureau is in Turkey and its scientific bureau is situated in Pakistan. It consists of predominantly Muslim-majority states as it is a trade bloc for the Central Asian states connected to the Mediterranean through Turkey, to the Persian Gulf via Iran and to the Arabian Sea via Pakistan.
Moreover, Iran’s non-oil exports to the [Persian] Gulf Cooperation Council stood at 19.23 million tons worth $5.45 billion during the period under review, registering 8% and 24% falls in tonnage and value respectively.
The (P)GCC is a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf, except Iraq, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. The charter of the council was signed on 25 May 1981, formally establishing the institution.
All current member states are monarchies, including three constitutional monarchies (Qatar, Kuwait and Bahrain), two absolute monarchies (Saudi Arabia and Oman) and one federal monarchy (the UAE, which is composed of seven member states, each of which is an absolute monarchy with its own emir).
There have been discussions regarding the future membership of Jordan, Morocco and Yemen. In order to reduce their future dependence on oil, the member states are pursuing unprecedented economic structural reform.
Non-Oil Exports to CIS, ASEAN
Iran's non-oil exports to the Commonwealth of Independent States hit 6.47 million tons worth $2.23 billion, up 55% and 22% in volume and value respectively YOY.
CIS is a political and economic intergovernmental organization of nine member states, all of which are former Soviet Republics located in Eurasia (primarily in Central to North Asia), formed after the dissolution of Soviet Union.
Ukraine withdrew its associate membership in May 2018 and Georgia withdrew in 2008, while the Baltic states (Estonia, Latvia and Lithuania), which regard their membership in the Soviet Union as an illegal occupation, chose not to participate.
Iran exported close to 4.87 million tons of non-oil goods worth nearly $1.94 billion to the Association of Southeast Asian Nations in the fiscal 2019-20 to register a 0.1% rise in tonnage and an 8% decrease in value YOY.
ASEAN is a regional intergovernmental organization comprising 10 countries, namely Indonesia, Thailand, Singapore, Malaysia, Vietnam, the Philippines, Myanmar, Cambodia, Brunei and Laos, in Southeast Asia, which promotes cooperation and facilitates economic, political, security, military, educational and sociocultural integration among its members and other Asian countries. It also regularly engages other countries in the Asia-Pacific region and beyond.
A total of 3.14 million tons of Iranian non-oil goods worth $1.07 billion headed to member states of Eurasian Economic Union during the same period, which shows a respective rise of 102% and 75% in tonnage and value YOY.
EEU was established in 2015 based on the Customs Union of Russia, Kazakhstan and Belarus, and was later joined by Armenia and Kyrgyzstan. In 2016, Vietnam officially became the first non-regional country to join the bloc’s free trade zone, which is designed to ensure the free movement of goods, services, capital and workers.
Since then, more than 40 countries and international organizations, including China, Indonesia, Israel, South Korea, Egypt and India, as well as some South American countries, have expressed interest in a free-trade deal with EEU.
Iran's non-oil exports to the European Union stood at 688,500 tons worth $713 million, experiencing a 41.5% and 33% YOY decline in tonnage and value respectively.
EU is a political and economic union of 27 member states located primarily in Europe. It has developed an internal single market through a standardized system of laws that apply in all member states in those matters, and only those matters, where members have agreed to act as one. The union’s policies aim to ensure the free movement of people, goods, services and capital within the internal market; enact legislation in justice and home affairs; and maintain common policies on trade, agriculture, fisheries and regional development.
Fiscal 2019-20 Foreign Trade in Detail
Iran’s total non-oil foreign trade stood at $85 billion in the fiscal 2019-20, of which exports accounted for $41.3 billion and imports for $43.7 billion, Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, has been quoted as saying by Mehr News Agency.
Oil-based products and byproducts, 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.
Noting that Iran traded over 169 million tons of goods last year, the official said exports weighed 133.9 million tons—three times as much as the imports in weight and about 13.5% more than the previous year. He added that in terms of value, however, exports show a 7% decline year-on-year.
“Imports reached 35.3 million tons in the fiscal 2019-20, indicating a 9.3% growth year-on-year. A $2.4-billion in 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.
“Petrochemicals made up the lion’s share of exports, which indicates that the country’s dependency is moving from selling unprocessed goods toward exporting petroleum products. However, the fact that each ton of Iran’s imports was valued at $1,220 while each ton of exports was worth only $309 indicates that the export of unprocessed goods remains a challenge for Iran’s economy," the IRICA chief said.
“China was the main export destination purchasing $9.5 billion worth of non-oil goods from Iran last year, followed by Iraq with $8.9 billion, Turkey with $5.4 billion, the UAE with $4.5 billion and Afghanistan with $2.3 billion. Our top five partners in exports were Asian countries and mostly our neighbors. Other countries imported $10.9 billion worth of Iran’s non-oil goods last year,” he was quoted as saying by ILNA.
Mirashrafi said China was Iran’s first trading partner in terms of imports.
“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 materials used in the manufacturing, 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.
IRICA’s numbers show intermediate goods worth $29.7 billion and capital goods worth $5.9 billion were imported into the country last year. Consumer goods constituted 8% of total imports last year, according to the official.