Iran's Non-Oil Foreign Trade Tops $58 Billion in Ten Months
EghtesadOnline: Iran’s foreign trade, excluding oil exports, stood at 122.8 million tons worth $58.7 billion in the 10-month period ending Jan. 19.
According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 94.54 million tons worth $28.06 billion and imports reached 28.24 million tons worth $30.63 billion of the sum.
Compared with the corresponding period of last year, exports registered a 17.7% and 20% decline in weight and value respectively.
“Imports saw a 2% and 15.5% decrease in weight and value respectively year-on-year,” he was quoted as saying by ISNA.
Main export destinations over the period included China with 22.8 million tons of non-oil goods worth $7.2 billion, Iraq with 22.3 million tons worth $6.3 billion, the UAE with 12.8 million tons worth $3.7 billion, Turkey with 5.7 million tons worth $2 billion and Afghanistan with 5.8 million tons worth $1.9 billion.
“These five countries imported an aggregate of 69.5 million tons of non-oil goods worth $21.3 billion from Iran, which account for 73.5% of the weight and 76% of the value of Iran’s overall exports over the period under review respectively,” the IRICA chief said.
Major exporters to Iran were again China with 2.9 million tons worth $7.9 billion, the UAE with 4.1 million tons worth $7.4 billion, Turkey with 4 million tons worth $3.4 billion, India with 1.9 million tons worth $1.8 billion and Germany with 966,000 tons of goods worth $1.4 billion.
“These five countries exported an aggregate of 13.9 million tons of goods worth $21.9 billion to Iran, which account for 49% of the weight and 71.6% of the noted that a total of 5.8 million tons of cargo were transited across the country over the period, indicating a 9.5% decline YOY,” he said.
Essential Goods Account for Lion’s Share of Imports
Noting that imports of essential goods accounted for 19.5 million tons of total imports (25 essential items constituted 69% of imports in terms of weight), the official said, “A total of 8.1 million tons of essential goods worth $9.9 billion were imported from Nov. 1, 2020, to Jan. 19, i.e. 101,000 tons per day.”
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
“Since the beginning of the current Iranian year (March 20), 194 vessels carrying essential goods docked and were unloaded at ports of the country. Imam Khomeini Port located in the southern Khuzestan Province accounted for 45% of imports, Bandar Abbas, a southern port city in Hormozgan Province, constituted 31%, and Chabahar in Iran's southeastern province of Sistan-Baluchestan accounted for 17% of total imports; the remaining volume entered the country via northern ports,” Amir Talebi, an official with Government Trading Corporation of Iran, was quoted as saying by IRNA recently.
An infographic recently published by Mehr News Agency quoting the Managing Director of Ports and Maritime Organization Mohammad Rastad showed there are 7 million tons of essential and non-essential goods and 92,000 TEU containerized goods parked in the country’s ports.
Over 1 million tons of cargos are either in the unloading process or waiting to enter the ports at present.
Amid high inflation and diminished purchasing power, the Iranian government has sought to ensure a steady supply of essential goods at subsidized prices.
Following the re-tanking of the national currency in early 2017, the government introduced stringent rules like banning the import of non-essential goods, especially those produced inside the country (known as Group IV goods). It allocated subsidized currency at the rate of 42,000 rials to a US dollar to 25 categories of goods (also known as Group I or essential goods) to help protect consumers against galloping inflation, rampant price gouging and hoarding, not to mention the high and rising cost of living.
Two other categories of imports were also defined: Group II, which mostly included raw materials, intermediate and capital goods, and Group III consisting of essential consumer goods.
Importers of products in Group II were to meet their forex requirements from the secondary forex market, known by its Persian name Nima. Importers of goods in Group III could buy hard currency from exporters who were not required to offer their forex earnings on Nima.
In the last fiscal year (March 2019-20), the government removed five items, namely red meat, butter, pulses, tea and sugar, from the list of basic goods entitled to subsidized currency.
So far, vegetable oil, oilseeds, corn, barley, soybean meal, raw material for manufacturing tires, heavy-duty vehicle tires, paper pulp and different types of paper are still considered essential goods.
A total of 25.09 million tons of essential goods worth close to $15.5 billion were imported into Iran during the last fiscal year (March 2019-20) to register a20.77% and 17.13% increase in weight and value respectively compared with the year before.
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, according to IRICA Spokesman Rouhollah Latifi.
“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,” he added.
Iran’s one-month foreign trade from Dec. 21, 2020, to Jan. 19 stood at 12.59 million tons worth $6.8 billion compared with previous month’s $7.4 billion.
Exports totaled 9.34 million tons worth $2.96 billion compared with the previous month’s $3.6 billion, Persian-language daily Donya-e-Eqtesad reported.
Imports during the 10th month of the Iranian year hovered around 3.24 million tons worth $3.83 compared with $3.7 billion of the preceding month.
Global trade has dropped by 30% following the outbreak of coronavirus and Iran was no exception. Seven countries, including China, Iraq, Afghanistan, the UAE and India, account for 75% of Iran’s foreign trade; over 50% of Iran’s non-oil exports are headed to Iraq and China, all indicative of our export vulnerability, Majid Reza Hariri, the chairman of Iran-China Chamber of Commerce, was quoted as saying recently.
“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down demand for and the prices of these exporting items,” he said.
“For our production lines to be operational, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported. Given the restrictions placed on oil sales, this figure seems to be unreachable.”
Iran has to prepare for a 30% decline in export value in the current Iranian year (March 2010-21) compared with last year due to the impacts of the spread of the coronavirus on national and international trade, Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture board of directors, has said.
“Under the current circumstances, it is estimated that the country’s exports will fall between $10 billion and $12 billion compared with last year. The main products that will experience a plunge due to the pandemic are petrochemicals, steel, mineral products, tiles, ceramics and nuts,” he was quoted as saying by ISNA.
Soltani, a former deputy head of ICCIMA, added that China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, hopes are that exports to this country will remain unaffected.
“Yet, the outbreak of Covid-19 as well as the nosedive in oil prices will make Iraq, our second biggest export destination, very cautious and we will be facing limitations on the commodities we can export to the neighboring country,” he said.
Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13% and 32% plunge in 2020 (best- and worst-case scenario), noting that it is likely that the economic crisis awaiting the world now will be more intense than the one experienced in 2008.