3.4m Tons of Necessity Goods Available at Ports

EghtesadOnline: A total of 3.4 million tons of essential goods have arrived at Iranian ports, of which corn accounts for 1.62 million tons, says Mehrdad Jamal-Arvanaqi, the deputy head of the Islamic Republic of Iran Customs Administration.

News ID: ۷۵۱۲۴۵

12 October 2020

“Of the total essential goods, 2.37 million tons are at Imam Khomeini Port in Khuzestan Province; 15 ships carrying 586,000 tons of essential goods are at the unloading process and 10 vessels carrying 584,000 tons of essential goods are waiting to dock,” the official was quoted as saying by ILNA on Saturday.

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

Amid high inflation and diminished purchasing power, the Iranian government has sought to ensure a steady supply of essential goods at subsidized prices.

Imam Khomeini Port in the southern Khuzestan Province is the main hub for importing essential goods in Iran. Close to 90% of Iran's demand for livestock feed raw material as well as 79% of grains are imported through this southern port.

The official put the current tonnage of non-essential, non-containerized goods at 3.79 million, of which 2.08 million tons have been stored at the Port of Shahid Rajaee, Bandar Abbas.

“Estimates show raw materials, spare parts and equipment, and production machinery account for more than 80% of these goods,” he said.

“The total number of containers available at countries’ ports at different stages of customs procedure stands at 102,000 TEU. However, the number of containers full of imported essential goods like rice and non-essential goods are at 30,000.”

A total of 25.09 million tons of essential goods worth close to $15.5 billion were imported into Iran during the last fiscal year (March 2019-20) to register a 20.77% and 17.13% increase in weight and value respectively compared with the year before.

According to IRICA Spokesman Rouhollah Latifi, this volume of essential goods imports accounted for close to 71% and 35% of the volume and value of last year’s total imports respectively.

“The imported essential commodities included wheat, sugar, corn, rubber, barley, processed tea, rice, different kinds of seeds, red meat, soybeans, pulses, paper, fertilizers and industrial machinery,” he was quoted as saying by ISNA.

CBI Supplies $5.2b of Cheap Foreign Currency in H1

The Central Bank of Iran’s Public Relations Department recently released a report regarding the allocation of subsidized foreign currency for the import of essential goods.

According to the report, in the current fiscal year (March 2020-21), as per the decision of the government’s Economy Council, a total of $8 billion at the rate of 42,000 rials per dollar will be allocated for the supply of essential goods.

Of the total sum, $5.5 billion will be extended to import essential items, such as corn, oilseeds, raw vegetable oil, soybean meals, barley and wheat, $1.5 billion to import pharmaceuticals and $1 billion to import medical equipment.

The government decided to supply $4 billion for importing essential goods and $1 billion for importing pharmaceuticals and medical equipment in the first half of the current year (March 20-Sept. 21)

H1 statistics show CBI has supplied $1,446 million to import corn; $714 million to oilseeds; $202 million to barley; $757 million to raw vegetable oil; $509 million to soybean meals; $290 million to wheat; $40 million to fertilizers; $15 million to paper; $544 million to medical equipment and $750 million to pharmaceuticals and their raw materials.

Despite all restrictions resulting from US sanctions, the central bank provided more than $5,267 million in subsidized forex for the supply of essential goods in H1, in cooperation with the industries, agriculture and health ministries.

Gov’t to Continue Subsidy Policy in Fiscal 2021-22

The government plans to continue subsidizing essential goods in the next fiscal year (March 2021-21).

According to Vice President Mohammad Baqer Nobakht, who doubles as the head of Iran’s Plan and Budget Organization, the government will channel earnings from the export of oil to import of essential goods at the subsidized rate of 42,000 rials per US dollar.

Nobakht made the remarks on the sidelines of a meeting of the so-called Budget Headquarters 1400 (the Iranian year starting March 2021) held on Aug. 22.

Discussions centered on the makeup of the headquarters, the Joint Commission—a parliamentary body responsible for reviewing the budget bill as well as the five-year economic development plans—and eight specialized taskforces.

These meetings are being held regularly up until Budget Day (the day on which the government submits its budget to the legislature for approval), i.e., Dec. 2.