EghtesadOnline: Iran’s foreign trade, excluding crude oil exports, reached 43.32 million tons worth $27.16 billion in the third quarter of the current fiscal year (Sept. 23-Dec. 21), according to the spokesman of the Islamic Republic of Iran Customs Administration.
"Autumn trade registered a 9% decline in terms of weight and 25% growth in terms of value year-on-year, 7% and 14% growth in weight and value quarter-on-quarter and 14% and 12% growth in weight and value compared with the first quarter [March 21-June 21] respectively,” Rouhollah Latifi was also quoted as saying by IRNA.
Q3 exports stood at 32.34 million tons worth $13.34 billion, registering a 17%, 20% and 25% growth in terms of value YOY, QOQ and compared with Q1, respectively.
Imports stood at 10.98 million tons worth 13.82 billion, registering a 30% and 37% YOY growth in weight and value, respectively.
The official noted that imports registered a 4% and 28% growth in terms of weight and 5.5% and 16% growth in terms of value compared with the second and first quarters respectively.
Iran’s foreign transactions (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 IRICA.
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 during the period, accounting for 46% of total weight and 42% of total value of exports.
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 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, such that a total of 23.1 million tons worth 12.4 billion were imported, 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.
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 ending Oct. 21 and Nov. 20, Iran’s trade balance was negative every month last year.
The two aforementioned months saw a trade surplus of $1.42 billion and $0.12 billion in respectively.
The highest exports 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 weighing 5.35 million tons, and $1.93 billion weighing 2.53 million tons respectively.
According to the Trade Promotion Organization of Iran, there were four main reasons behind the decline in Iran’s foreign trade in the fiscal 2020-21 compared with the year starting from the fiscal 2011-12 to 2013-14.
The main reason behind the decline was the fall in oil revenues. Parts of raw material costs are supplied from oil revenues. The decline in revenues caused problems in the supply of foreign exchange earnings and purchase of raw materials for export products, which led to a decline in export volume during the period.
Currency shock is another reason behind the decline. One of the main variables affected by currency shocks is non-good 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 prevented some exporters from meeting the CBI requirements, so they stopped exporting their products and waited for the currency market and forex laws to stabilize.
The US put sanctions on petrochemical industries and 39 related institutions, such that the US Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries. Oil prices also impacted petrochemical exports, as low oil prices in the fiscal 2020-21 and US sanctions reduced petrochemical production during the period under review.
The Covid-19 pandemic was another reason behind the significant decline in trade. Closure of borders, new standards for foreign trade and the wariness of other countries in buying exported products, especially for agricultural and food products, caused a decline in Iran’s foreign trade.