Foreign Trade Exceeds $80 Billion in 10 Months

Exports stood at 100 million tons worth $38.76 billion, registering a 7% and 38% year-on-year growth in weight and value respectively.

China, Iraq, Turkey, the UAE and Afghanistan were the main export destinations, IRIB News reported.

Imports totaled 33 million tons worth $41.47 billion, registering a 17% and 34% YOY increase in weight and value respectively.

The UAE, China, Turkey, Germany and Switzerland were the biggest exporters to Iran during the period.

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).

According to the Trade Promotion Organization of Iran, the drop in Iran’s foreign trade in the fiscal 2020-21 compared with the years from fiscal 2011-12 to 2013-14 is due to four main reasons.

The first reason behind the decrease was the decline in oil revenues. Parts of raw material costs are supplied from oil revenues. The decline in revenues caused problems in the way of foreign exchange earnings and purchase of raw materials for exports. Therefore, it caused a decline in the volume of exports in the period under review.

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 fall 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 CBI requirements, so they stopped exporting their products and waited for the currency market and forex laws to stabilize. 

The US imposed sanctions on petrochemical industries and 39 related institutions, and its Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries. 

Oil prices also impact the petrochemical product export and due to the low oil prices in the fiscal 2020-21 alongside the US sanctions, petrochemical production declined in the period under review.

The Covid-19 pandemic was another reason behind the significant decrease in trade. The closure of borders, new standards for foreign trade and the wariness of other countries in buying export products, especially agricultural and food products, caused a decrease in Iran’s foreign trade.