Iran’s Foreign Trade Exceeds $72b
EghtesadOnline: Iran’s foreign trade (excluding crude oil exports) stood at 122.5 million tons worth $72.1 billion in the first nine months of the current fiscal year (March 21-Dec. 21), registering an 11% and 38% year-on-year growth in weight and value respectively, according to the Islamic Republic of Iran Customs Administration.
According to IRICA caretaker, Alireza Moqaddasi, exports hit 92.3 million tons worth $35.1 billion to register an 8% and 40% increase in weight and value respectively compared with last year’s corresponding period.
Petrochemicals had the lion’s share of exported items with 42.4 million tons worth $14.7 billion in the period, accounting for 46% of total exports’ weight and 42% of value.
China was Iran's biggest export destination with 21.3 million tons of imports worth $10.2 billion, followed by Iraq with 23.5 million tons worth $6.8 billion, Turkey with 11.7 million tons worth $4.1 billion, the UAE with 8.3 million tons worth $3.4 billion and Afghanistan with 3.3 million tons worth $1.4 billion.
Imports hit 30.1 million tons worth $37 billion during the period, registering a 20% and 37% growth in weight and value YOY respectively.
The imported goods mainly consisted of essential goods: totaling 23.1 million tons worth 12.4 billion, which were 32% and 61% higher in weight and value YOY respectively.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
The UAE with 8.9 million tons of exports worth $11.5 billion, China with 2.5 million tons worth $8.4 billion, Turkey with 2.9 tons worth $3.7 billion, Germany with 593,000 tons worth $1.4 billion and Switzerland with 1.6 million tons worth $1.3 billion were the top five exporters to Iran.
Moqaddasi added that 9.16 million tons of foreign goods were transited through Iran to other destinations during the same period to register a 76% growth.
Shahid Rajaee Special Economic Zone, located in the southern Hormozgan Province, accounts for the highest share of all goods exported from and imported to Iran.
The economic zone, which has a loading/unloading capacity of 100 million tons per year, accounts for over half of Iran's trade and about two-thirds of total freight transit through the country.
The lion’s share of Iran's containers was handled at Shahid Rajaee Port Complex.
With 18 gantry cranes and 40 berths, Rajaee is the most advanced container port of Iran.
Launched in 1985, the port has expanded every year and is currently connected to 80 ports worldwide.
The significance of this port lies in its large capacity, including its location in the Persian Gulf, container terminal, fuel bunkering, access to 24 kilometers of railroads and round-the-clock truck transportation.
In terms of transit, again Shahid Rajaee Special Economic Zone tops the list of Iranian customs terminals.
Fiscal 2020-21 in Review
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 the fiscal 2020-21 ($34.52 billion exports and $38.5 billion imports).
Statistics released by the Central Bank of Iran show that except in the month to Oct. 21 and the one to Nov. 20, Iran’s trade balance was negative every month last year.
The two aforementioned months registered a $1.42 billion and $0.12 billion in trade surplus respectively.
The highest export value was registered in the month to Oct. 21 with $4.67 billion weighing 19.26 million tons, as the month to March 20 registered the highest import value with $4.57 billion weighing 2.92 million tons.
The lowest export and import value were registered in the month to April 19 with $1.65 billion worth of goods weighing 5.35 million tons, and $1.93 billion weighing 2.53 million tons respectively.
According to the Trade Promotion Organization of Iran, four main reasons caused the decline in Iran’s foreign trade in the 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 and the fall in revenues caused problems in purchasing raw materials for export products. Therefore, it caused a decline in volume of exports during the period.
Currency shock is another reason behind the decline. One of the main variables affected by currency shocks is non-oil exports. Iran’s currency market faced an unpredicted shock in the fiscal 2020-21 due to the intensification of US sanctions, the decline 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 the currency market and forex laws to stabilize.
The US reimposed 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 impact petrochemical exports and due to the low oil prices in the fiscal 2020-21 and the US sanctions, those exports registered a decline in the period under review.
The Covid-19 pandemic was another reason behind the significant cut in trade. Closure of borders, new standards for foreign trade and the wariness of other countries for buying exported products, especially for agricultural and food products, caused a decline in Iran’s foreign trade.