Iran's Q1-3 Transactions With Turkey Increase 76% to $3.3 Billion
EghtesadOnline: Iran and Turkey registered $3.34 billion in trade during the first nine months of 2021, 76.38% higher than last year’s corresponding figure.
The former exported goods worth $1.69 billion during the period, up 140.62% year-on-year, while imports from Turkey grew by 38.61% YOY to $1.65 billion, latest data by Turkish Statistical Institute show.
Iran and Turkey exchanged $503.37 million worth of goods and commodities in September 2021, 90.48% higher than the value registered in the same period of last year.
Iranian exports to Turkey accounted for $256.7 million of the sum, up 171.81% YOY.
Turkey’s exports to Iran stood at $246.66 million, up 45.26%.
Monthly trade between Iran and Turkey fell below $300 million in September 2020, mostly due to a decline in Iran's exports to the neighboring country following Covid-19 restrictions. However, trade started to improve in December, raising hopes for recovery from the impact of the pandemic on bilateral trade.
Bilateral trade stood at $3.43 billion in 2020, registering a decrease of 45.82% compared with 2019.
Iran exported $1.192 billion worth of goods to Turkey in 2020 to register a 66.9% year-on-year decline while imports from Turkey stood at $2.245 billion, down 17.97% YOY.
Turkey’s collective value of exports amounted to $169.482 billion down 6.3%. The country’s imports amounted to $219.397 billion in 2020, up 4.3%, compared with January-December 2019.
Iran’s Biggest Export Destination
According to the Islamic Republic of Iran Customs Administration, Turkey was Iran’s biggest export destination in the sixth month of the current Iranian year (Aug. 23-Sept. 22) with 5.84 million tons worth $1.2 billion of shipment, registering a whopping growth rate of 1,420% and 696% in tonnage and value respectively year-on-year.
Turkey was followed by Iraq with 1.83 million tons worth $677 million (up 30% and 19% in weight and value respectively YOY), China with 2.51 million tons worth $668 million (up 11% in volume but down 1% in value YOY), the UAE with 807,000 tons worth $331 million (down 33% and 12% in weight and value respectively YOY) and Afghanistan with 351,000 tons worth $144 million (down 50% and 39% in tonnage and value respectively YOY).
According to IRICA Spokesman Rouhollah Latifi, Iran’s total exports stood at 14.52 million tons worth $4.14 billion during the month under review, showing a 75% and 56% rise in volume and value respectively YOY.
Turkey was also the third biggest exporter to Iran during the month ending Sept. 22 with 540,000 tons worth $641 million of shipments.
It came after the UAE with 1.48 million tons worth $1.91 billion (up 254% and 142% in weight and value respectively YOY) of exports to Iran.
China with 418,000 tons worth $1.43 billion of exports came second.
Turkey was followed by Switzerland with 371,000 tons worth $328 million and Germany with 44,000 tons worth $237 million.
Iran’s total foreign trade, excluding oil exports, stood at 19.84 million tons worth $10.63 billion during the month to register a 135% and 98% growth in weight and value respectively compared with the similar period of last year.
Preferential Trade Agreement
Finalizing ongoing negotiations with Iran for the expansion of bilateral Preferential Trade Agreement is a priority for Turkey, Energy and Natural Resources Minister Fatih Donmez said in May.
“The trade deal came into effect on Jan. 1, 2015, and negotiations have been ongoing to expand the pact by increasing the number of traded products between Turkey and Iran,” Donmez told the virtual 28th Turkey-Iran Economic Commission, Daily Sabah reported.
Customs cooperation was another topic up for discussion at the meeting. Within this scope, both sides agreed to an electronic data interchange protocol for conducting a simplified customs frontier project and the mutual recognition of an Authorized Economic Operator project.
The Turkish minister noted that these projects will have a positive impact on foreign trade volumes by enabling easier and faster trade while eliminating bureaucratic procedures based on mutual trust.
Both sides agreed that technical teams would meet in the near future to put the plans into action.
“The two sides also agreed on increasing fairs and trade delegations between Turkey and Iran to show our [Turkey’s] concrete support and the great importance attached to cooperation between private sector representatives,” he said.
“Support for the activities of the Turkey-Iran Business Council and other private sector establishments, notably small- and medium-sized enterprises, would also continue, particularly after the pandemic.”
Consequently, both sides agreed to commit to talks on developing an “action plan” between the Small and Medium Enterprises Development Organization of Turkey and its Iranian equivalent, Iran Small Industries and Industrial Parks Organization.
Donmez concluded that the commission also addressed other areas of cooperation, including health, energy, transportation, education, environment, agriculture and forestry.
Social Security Agreement
Turkey-Iran Social Security Agreement, signed on March 24, is said to have strengthened commercial and economic relations between the two countries.
Fatih Cayabatmaz from the Independent Industrialists and Businessmen Association, told Anadolu Agency that the agreement offers important opportunities for the business world.
"The implementation of Turkey-Iran Social Security Agreement will increase the Iranian businessmen's interest in Turkey,” he added.
Noting that Iranians were at the top of the list of foreigners establishing a company in Turkey, Cayabatmaz said, "In February, Iranians came first on the list with 75 companies.”
In addition to reinforcing relations, it will warm “the two nations toward each other", he added.
Cayabatmaz said that with the new agreement, Iranian businessmen who have founded companies in Turkey need to submit documents indicating that they paid insurance in their home country for their Iranian staff, without having to pay insurance in Turkey.
"This will reduce costs and increase the possibility of Iranian businessmen’s investment in Turkey. The same applies for Turkish businessmen operating in Iran and their personnel," he said.
He noted that health insurance for an employer would be valid in the other country, allowing workers to access health services free of charge.
A previous Social Security Agreement between Turkey and Iran, inked on April 16, 2016, was approved and took effect once again by the Turkish Parliament on March 24.
With the addition of Iran, the number of countries with effective social security agreements with Turkey rose to 34.