Iran, Russia Record 24% Growth in Bilateral Trade

EghtesadOnline: Iran’s commercial exchanges with Russia amounted to $1.33 billion in the first seven months of 2019, indicating a 24.6% rise compared with the corresponding period of 2018, according to the Federal Customs Service of Russia.

News ID: ۷۴۸۴۱۵

14 September 2019

Iran exported $333.7 million worth of commodities to Russia from January to July, down 6.2% year-on-year, Russian news agency Sputnik reported.

Russia’s exports to Iran totaled $999.3 million, up by 39.9% YOY.

Iran’s share in Russia's foreign trade during the period rose to 0.4% from 0.3% in the corresponding period of last year, Financial Tribune reported.

Russia, India Pledge to Continue Economic Coop. With Iran

Russia and India will continue their trade and economic cooperation with Iran, which they qualify as mutually beneficial and legitimate, according to a joint statement after the Russian-Indian summit earlier this month.

"The sides acknowledge the importance of full and efficient implementation of the Joint Comprehensive Plan of Action on the Iranian nuclear program for ensuring regional and international peace, security and stability. They confirm full commitment to Resolution 2231 of the UN Security Council," the statement read.

Russia and India maintain that the crisis must be resolved peacefully. Therefore, both countries have expressed determination to continue legitimate trade and economic cooperation with Tehran.

According to the joint declaration, Russia and India would continue promoting trade in national currencies.

"Work will continue to promote a system of mutual transactions in national currencies," they said.

The summit was held in Russia's Vladivostok, which was hosting the Eastern Economic Forum. Rossiya Segodnya International Information Agency was an official media partner of the event.

Grain Trading

Iran’s private sector representatives and members of Tehran Chamber of Commerce, Industries, Mines and Agriculture recently held a meeting with a visiting Russian delegation from the Chamber of Commerce and Industry of the Republic of North Ossetia–Alania to discuss expansion of grain trade between Iran and Russia.

The meeting was held at TCCIM headquarters, the chamber’s website reported.

The Russian delegation, headed by CCI President Kazbek Tuganov, was accompanied by managing directors of several local companies active in the field of grain production.

Agricultural, food and livestock products accounted for 74% of Iran's overall exports to Russia in 2018. These products accounted for 65% of Russia's total exports to Iran.

Statistics provided by the Islamic Republic of Iran's Customs Administration show Iran traded 2.67 million tons of non-oil commodities worth $1.62 billion with Russia during the past fiscal year (ended March 20), registering a 41.48% and 59.13% growth in tonnage and value respectively compared to the year before.

Exports to Russia amounted to 499,802 tons worth $280.53 million to register a 4.07% and 4.07% decline in tonnage and value respectively year-on-year.

Russia was Iran’s 14th export destination in the world during the year. In return, Russia exported 2.17 million tons of commodities worth $1.34 billion to Iran, up by 59.39% and 84.52% in tonnage and value respectively YOY.

Russia was the eighth exporter of goods to Iran in the world last year.

Major Iranian commodities exported to Russia were kiwi, tomatoes, apples and pistachios. It mainly exported nuclear reactor parts, sunflower oil, field corn and barley to Iran.

The Republic of North Ossetia–Alania is a federal subject of Russia. The agricultural sector of the region is varied and specializes in the cultivation of wheat, corn and sunflowers, horticulture, viticulture and cattle and sheep breeding.

The ministries of agriculture of Russia, Kazakhstan and Iran concluded a trilateral memorandum of understanding on the issue of wheat trade in February.

The agreement was the result of negotiations on a temporary agreement leading to the formation of a free trade zone between the Eurasian Economic Union and Iran.

Minister for Trade of the Eurasian Economic Commission Veronika Nikishina was quoted as saying that the signing of a memorandum between Russia and Kazakhstan-key suppliers of wheat to the world market-and Iran will be the first step toward the revival of full supply chains of high-quality wheat from EEU to Iran and the whole region.

"We need to consider this event in the context of preparations for the entry into force of the interim agreement signed in May 2018," she said. "We are convinced that cooperation with Iranian partners is promising and ready to continue the dialogue in various directions of trade and economic cooperation. In this regard, we look forward to the imminent completion of the procedures for ratification of the agreement from both EEU member countries and Iran."

Iranian President Hassan Rouhani signed into law the agreement on establishing a free trade zone between Iran and Eurasian Economic Union last month.

Iran and EEU are looking to substantially increase trade, as the two sides signed a three-year provisional agreement on May 17, 2018, for the bloc to welcome Iran into EEU. The arrangement is the first step in implementing free trade between Iran and the five members of the union. It lowers or abolishes customs duties, setting off a three-year process for a permanent trade agreement.

In accordance with the memorandum, wheat from Russia and Kazakhstan will be supplied to Iran without customs duties and other fees equivalent to it. In addition, Iran will allow the transit of wheat through its territory and support the import of wheat as part of the swap contract. It will also ensure that current or future bans, quantitative and other restrictions on the use, marketing, sale, supply and sale of wheat to Iran will not apply to wheat temporarily imported into Iranian territory for further processing and export.

For its part, the Russian and Kazakh sides will support the development of a mechanism for providing credit lines to Iranian buyers of wheat from Russia and Kazakhstan, guaranteeing that the wheat delivered to Iran meets its sanitary and phytosanitary requirements.

The parties to the agreement plan to set up a joint tripartite working group that will address issues related to the supply of wheat in accordance with the memorandum. The group is expected to meet at least once a year, while the memorandum has been designed for five years.

According to Kazakhstan’s Deputy Agriculture Minister Gulmira Isaeva, the republic has the opportunity this year to supply from 500,000 to 1 million tons of wheat to Iran.

In March 2016, Iran imposed a ban on the import of wheat. In subsequent years, deliveries were made only on certain permits and individual contracts.

Earlier, according to the data of Rusagrotrans JSC, in 2014-15 of the agricultural year, Russia supplied 1.7 million tons of wheat from Iran’s total imports of 6.3 million tons, in 2015-16 1.4 million tons out of 3.5 million tons. In the 2017-18 agricultural year, exports decreased to 131,000 tons from 200,000 tons.