Gov’t to Allocate $6b for Subsidized Essential Goods Import in H1 2021-22

Imports of pharmaceuticals and medical devices needed by the Health Ministry will receive $1.5 billion of the sum and the rest will be given to Agriculture Ministry and the Ministry of Industries, Mining and Trade for importing other essential goods, he was quoted as saying by IRNA. 

Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.

At present, 5.2 million tons of essential goods have been unloaded at Iranian ports and awaiting customs clearance, Mehrdad Jamal Orounaqi, a senior official with the Islamic Republic of Iran Customs Administration, said on Saturday. 

According to Mojgan Khanlou, a senior official with the Plan and Budget Organization of Iran, the government is allowed to gradually discontinue the allocation of subsidized forex for the import of essential goods during the first half of the fiscal 2021-22. 

“Prices will increase to some extent and demand will decline and a relative recession will come eventually. Food and related industries are likely to experience a relative recession by the end of the year and the beginning of the new Iranian year,” Kaveh Zargaran secretary of the Federation of Iranian Food Associations, said.

Imports of all essential goods, except corn, declined this year compared with last year, Domestic Commerce Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture recently reported, citing figures released by the Central Bank of Iran.

A total of 21.4 million tons of essential goods worth $10.84 billion were discharged from customs during the 11 months to Feb. 18, according to Rouhollah Latifi, the spokesperson of the Islamic Republic of Iran Customs Administration.

Total imports stood at 30.81 million tons worth $34.32 billion during the period; 25 groups of essential goods accounted for 69% of weight and 31.5% of value of overall imports, he added. 

According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, imports of 25 essential goods stood at 21.4 million tons worth $11 billion during the first 11 months of the current fiscal year (March 20, 2020-Feb. 18). 

Imports saw a respective 6% and 15% decrease in weight and value year-on-year, he was quoted as saying by IRIB News. 

“Five types of essential goods, namely corn, barley, oilseeds, raw oil and soybean meal, were imported at the subsidized rate of 42,000 rials per US dollar, weighing 15.5 million tons worth $6.86 billion. They accounted for 72% of overall essential goods imports in terms of weight and 63% of overall essential goods imports in terms of value,” Latifi was quoted as saying by IRNA. 

“Corn imports stood at 9.12 million tons worth $2.29 billion during the period under review; it was the top subsidized imported commodity both in terms of weight and value. Corn imports accounted for 42% of the weight and 21% of the value of essential goods imports.

It was followed by 13,560 tons of pharmaceuticals and medical equipment worth $1.48 billion, 2.04 million tons of oilseeds worth $1.07 billion, 1.03 million tons of edible oils worth $895.96 million, 1.61 million tons of soybean meal worth $693.78 million and 1.7 million tons of barley worth $422.1 million.

Among other essential goods imported during the period were 2.92 million tons of wheat worth $813.31 million, 849,837 tons of rice worth $776.11 million, 1.01 million tons of raw sugar worth $370.66 million, 57,258 tons of tea worth $286.54 million and 44,459 tons of manufacturing machinery worth $255.85 million.

According to Latifi, paper pulp worth $175 million, publication paper worth $171 million, fertilizers worth $144 million, pulses worth $134 million, frozen red meat worth $126 million, seeds worth $78 million, heavy duty tires worth $77 million, technical pesticides worth $57 million, butter worth $40 million, fresh red meat worth $29 million and print paper worth $4.2 million were the rest of essential goods imported during the period.