Trade With Neighbors Accounts for 50% of Total Commercial Exchanges
EghtesadOnline: Iran’s export to its 15 neighboring countries accounted for 50.4% of its total exports in value during 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 Affairs Department.
“Exports to 15 neighboring countries stood at 22.29 million tons worth $7.25 billion during the period, registering a 26% and 42% growth in weight and value respectively year-on-year,” Farzad Piltan was quoted as saying by Mehr News Agency.
Iran’s trade with neighboring countries stood at $14.35 billion during the period, according to the latest data released by the Islamic Republic of Iran Customs Administration.
Iraq with $2.82 billion and a share of 19.6% from the total value of exports to neighbors, the UAE with $1.63 billion and an 11.3% share, Turkey with $923.39 million and 6.4%, Afghanistan with $728.46 million and 5.1% and Pakistan with $341.39 million and 2.4% were the top five exports destinations among neighbors.
Total imports from neighboring countries in the four-month period hit $7.1 billion.
The UAE with $4.68 billion, Turkey with $1.51 billion, Russia with $429.78 million, Oman with $176.2 million and Iraq with $140.52 million were the top five exporters to Iran.
Iran’s neighboring countries are Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, the UAE, Bahrain and Saudi Arabia.
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 the 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 year-on-year growth rates 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.
The main export destination was China with 10 million tons of goods worth $4.3 billion.
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.
The UAE was the main exporter to Iran.
Fiscal 2020-21 in Review
Iran traded $36.45 billion worth of non-oil goods with its 15 neighboring countries in the last Iranian year (ended March 20, 2021) down from $40 billion in the preceding year.
Iran’s exports to its neighbors totaled $20.35 billion in the fiscal 2021-22, indicating a $4 billion decrease in value year-on-year.
Imports amounted to $16.09 billion during the period under review, unchanged compared with the same period of last year.
The UAE was Iran’s leading trade partner among the neighboring states, with $14.4 billion worth of non-oil exchanges.
“Our exports to the neighboring country hit 15.27 million tons worth $4.62 billion, showing a 27% and 6.5% rise in volume and value respectively YOY. Exports account for 13.6% and 13.4% of Iran’s total exports during the period under review. The country was Iran’s third biggest export destination after China and Iraq,” Rouhollah Latifi, the IRICA spokesman, has been quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mining and Trade (Otaghiranonline.ir).
The spokesman noted that the main exported goods included seafood, flower, fruit and vegetable, nuts, dried fruit, saffron and other spices, chocolate and pastry, fruit juice, vinegar, construction materials, cement, minerals, floorings, carpet, apparel, footwear, handicrafts, steel products, doors and windows, kitchen utensils, industrial machinery, light bulbs, furniture, musical instruments, medical equipment, electric and electronic devices, auto spare parts, packaging machinery and wickerwork.
“We imported close to 5.07 million tons of goods worth $9.65 billion from this southern neighbor. The figures account for 15% and 25% of Iran’s total imports over the year under review respectively. The UAE was the second biggest exporter to Iran after China,” he added.
Latifi noted that Iran’s main imports from the UAE over the period were tropical fruit, livestock, pulses, coffee and cocoa, spices, rice, barley, oilseeds, seeds, edible oils, tobacco, minerals, industrial oils and raw materials, different kinds of supplements, medical and dentistry equipment, glue, paper and cardboard, tire production raw materials, fabric and thread, packaging raw materials and machinery, steel products, automatic doors, elevators, bolts and nuts, auto spare parts, road construction and industrial machinery, as well as sports equipment.
UAE Trade Goals
Iran had set the goal of increasing exports to the UAE to $6 billion in the year ending March 2020 and $7 billion in the year ending March 2021; which goals were not achieved.
“Our actual exports to the neighboring country stood at $4.5 billion in the year ending March 2020. Iran has set its export target at $8 billion for the next year [March 2021-22]; there are multifold barriers in the way of reaching this goal,” Farshid Farzanegan, the chairman of Iran-UAE Chamber of Commerce, said before the Iranian New Year (started March 21).
According to the official, these barriers include the Central Bank of the UAE’s strict policy regarding Iranians’ banking accounts, inefficiency of Iran’s road transport, particularly that of refrigerated containers, and lack of infrastructures for cold storage of agricultural products. “Countless trade rules and regulations are constantly shifting. Iran-UAE trade would improve if there had been stability in terms of introducing laws,” he said.
Farzanegan noted that facilitating visits by economic operatives, improving banking ties, holding permanent exhibitions, employing active economic diplomacy regarding the UAE, Bahrain and the Saudi Arabia, which has the import capacity of up to $135 billion, will help improve business.
“As we speak, Iranian products find their way into Saudi Arabia through the UAE and Oman,” he added.
The official said the launch of economic and trade departments in Iran’s Embassy in the UAE and efforts to boost tourism would be helpful.
“We at the Iran-UAE Chamber of Commerce are all set to transfer our data and information to these departments. Afghanistan is now exporting Iranian handicrafts and saffron to the UAE,” he added.
Noting that Iran needs to approve laws related to the standards of the Financial Action Task Force, Farzanegan said, “Iran’s blacklisting by the global watchdog has interrupted trade with the UAE.”
Following the UAE in the list of Iran’s trade partners among the neighboring countries were Iraq with $7.58 billion, followed by Turkey with $6.9 billion, Afghanistan with $2.31 billion and Russia with $1.53 billion.
Pakistan and Oman followed with $1.17 billion and $871 million, respectively.
Iranian goods worth $7.44 billion were exported to Iraq, to put the country on top of the list of Iran’s export destinations among the neighboring states.
The UAE, Turkey and Afghanistan came next with $4.66 billion, $2.53 billion and $2.3 billion, respectively.
The UAE, with $9.75 billion, accounted for the largest share of Iran’s imports from neighboring countries during the period. Turkey followed with $4.39 billion worth of goods to Iran. Russia with more than $1.03 billion worth of goods exported to Iran came next.
Foreign Non-Oil Trade
Iran’s total foreign non-oil trade stood at 145.7 million tons worth $73 billion in the last fiscal year (March 2020-21), suggesting that neighboring countries accounted for about half of the total trade volume.
According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 112 million tons worth $34.52 billion and imports constituted 34.4 million tons worth $38.5 billion of the sum.
“The main export destinations were China with 26.6 million tons worth $8.9 billion of imports from Iran, Iraq with 25.6 million tons worth $7.3 billion, the UAE with 15.2 million tons worth $4.6 billion, Turkey with 6.3 million tons worth $2.5 billion and Afghanistan with 7 million tons worth $2.2 billion. These five countries imported more than 80 million tons of non-oil goods worth $25.7 billion,” he was quoted as saying by Mehr News Agency.
China, Iran’s biggest trading partner, accounted for 26% of Iran's total non-oil exports, as 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period. Pistachio, nuts, minerals, construction materials, methanol, carpet, iron ore, glassware and fruits were the main types of goods exported from Iran to China in the last fiscal year.
Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 21, 2021, to account for 10.6% of the total volume of Iran's imports and 25.3% of the total value of imports during the period. Industrial machinery and raw materials, medical equipment, paper, wood, textile, auto parts and sports equipment were Iran's main imports from the South Asian state in the fiscal 2020-21.
“Iran’s foreign trade reduced by 25 million tons due to sanctions and the Covid-19 pandemic,” he said, adding that the country’s trade deficit stood at $4 billion.