EghtesadOnline: Arab countries were the main destinations of Iranian exports among its 15 neighboring countries in the first four months of the current fiscal year (March 21-July 22), according to the director general of Trade Promotion Organization of Iran's Arab and African Countries Affairs Department.
“Among the list of 15 neighboring countries of Iran, which with $7.23 billion of imports accounted for 50.4% of Iran’s total exports during the period. Arab countries, including Iraq and the UAE, with a share of 19.6% and 11.3% from total exports respectively were the first and second top export destinations,” Farzad Piltan was also quoted as saying by ILNA.
Iran’s exports to its top 20 destinations stood at $13.3 billion, accounting for 85.7% of total exports.
Exports to Iraq hit $2.82 billion, up 43% YOY, with a share of 19.6% from the total exports while exports to the UAE hit $1.63 billion, up 33% YOY, accounting for 11.3% of total exports, which were Iran’s second and third main export destinations respectively after China.
Piltan added that Oman with $177 million worth of imports from Iran, 50% higher than last year’s corresponding year and a 1.2% share from Iran’s total exports, was the 11th export destination.
Syria with $66 million up 36% YOY and a share of 0.5% of total exports was the 20th export destination.
Qatar with $45 million and a share of 0.3% up 24% YOY, Kuwait with $43 million and a share of 0.3% down 5% year-on-year and Bahrain with $2 million and a share of 0.01%, down 2% YOY, were the 12th, 13th and 14th main export destinations respectively among the 15 neighboring countries.
Saudi Arabia was the last export destinations with no noticeable share in export.
Iran traded 50.8 million tons of non-oil goods worth $29 billion with other countries during the first four months of the current fiscal year (March 21-July 22), indicating an increase of 21% in weight and 47% in value compared with the corresponding period of last year.
According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, exports reached 38.3 million tons worth $14.3 billion, which shows a year-on-year growth rate of 27% and 65% in weight and value, respectively.
Major exported goods included liquefied gas, polyethylene, semi-finished steel products, methanol, gasoline, steel ingots, liquid propane, bitumen and copper cathode.
Imports hit 12.5 million tons worth $14.5 billion, registering an increase of 5% in weight and 32% in value compared with last year’s same period, ISNA reported.
Iran’s non-oil foreign trade declined from $85 billion in the fiscal 2019-20 ($41.3 billion worth of exports and $43.7 billion of imports) to $73 billion in fiscal 2020-21 ($34.52 billion exports and $38.5 billion imports).
According to the Trade Promotion Organization of Iran, there were four main reasons behind the decrease in Iran’s foreign trade in fiscal 2020-21 compared with the years from fiscal 2011-12 to 2013-14.
The first reason behind the decrease was the fall in oil revenues. Parts of raw material costs are supplied from oil revenues. The decline in revenues reduced foreign exchange earnings and prevented the import of raw materials. As a result, it caused a decline in the volume of exports during the period.
Currency shock is another reason behind the decline in non-good exports. Iran’s currency market faced an unpredicted shock in the fiscal 2020-21 due to the intensification of US sanctions, the fall in foreign exchange reserves and the Covid-19 pandemic.
Alongside these problems, the Central Bank of Iran’s forex earnings law made some exporters unable to meet the CBI requirements, so they stopped exporting their products and waited for stability in the currency market and forex laws.
The US imposed sanctions on petrochemical industries and 39 related institutions, and the US Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries. Oil prices also impacted petrochemical exports and due to the low oil prices in fiscal 2020-21 alongside the US sanctions, petrochemical products registered a decline in the period under review.
Coronavirus pandemic was another reason behind the significant decrease in trade. Closure of borders, new standards for foreign trade and the wariness of other countries in exporting Iranian products, especially agricultural and food products, caused Iran’s foreign trade to shrink.