Iran Achieves Non-Oil Trade Surplus in 8th Fiscal Month

EghtesadOnline: Iran’s non-oil foreign trade reached $6.3 billion in the month ending Nov. 20 (the eighth month of the current fiscal year), according to Rouhollah Latifi, the spokesman of the Islamic Republic of Iran Customs Administration.

News ID: ۷۵۱۶۴۶

06 December 2020

Noting that exports weighed four times as much as imports during the month under review, the official said exports hit 10.24 million tons worth $3.21 billion and imports reached 2.54 million tons worth $3.09 billion, indicating a trade surplus of $118 million for the country.

“Top export destinations during the month under review [Oct. 22-Nov. 20] included China with $912 million, Iraq with $498 million, the UAE with $452 million, Afghanistan with $193 million and Turkey with $129 million,” Latifi was quoted as saying by IRNA.

Iran’s non-oil foreign trade hit 97.7 million tons worth $44.6 billion in eight months leading to Nov. 20.

According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 75 million tons worth $21.5 billion and imports constituted 21.8 million tons worth $23.1 billion.

Compared with the corresponding period of last year (March 21-Nov. 21, 2019), exports registered a 14% and 19% decline in weight and value respectively. Imports saw respective decrease of 1% and 18% in weight and value year-on-year, he was quoted as saying by IRNA.

Imports of essential goods accounted for 15.2 million tons (about 70%) of total imports.

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.

Main export destinations over the period included Iraq and China with $5.3 billion each, the UAE with $2.7 billion, Turkey with $1.6 billion and Afghanistan with $1.5 billion.

Noting that pistachio was Iran’s fourth biggest export product during the period, the IRICA chief said, “Each kilogram of pistachio was exported at $6, compared with the average 30 cent per kilogram of Iran’s exports.”

“Top exporters to Iran were China with $6 billion, the UAE with $5.4 billion, Turkey with $2.6 billion, India with $1.4 billion and Germany with $1.1 billion,” he added.

Mirashrafi said a total of 4.47 million tons of cargo were transited across the country over the period, indicating a 15% decline YOY.

Notably, Iraq overtook China by a narrow margin when it comes to exports from Iran. The neighboring country began to overtake China as Iran’s biggest destination since last fiscal month.

Majid Reza Hariri, chairman of Iran-China Chamber of Commerce, was recently quoted as saying that global trade has dropped by 30% following the outbreak of coronavirus and Iran was no exception.

“Seven countries, including China, Iraq, Afghanistan, the UAE and India, account for 75% of our foreign trade; over 50% of Iran’s non-oil exports are headed to Iraq and China, all indicative of our export vulnerability," he said.

“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down demand for and the prices of these exported items.”

Hariri noted that for operating production lines, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported.

“Given the restrictions placed on oil sales, this figure appears to be unreachable,” he added.

Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture’s board of directors, said Iran has to prepare for a 30% decline in export value in the current Iranian year (March 2020-21) compared with last year due to the impact of the novel coronavirus on national and international trade.

“Under the current circumstances, it is estimated that the country’s exports will fall between $10 billion and $12 billion compared with last year. The main products that will experience a plunge due to the pandemic are petrochemicals, steel, mineral products, tiles, ceramics and nuts,” he was quoted as saying by ISNA.

Soltani further said China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, hopes are that exports to this country will remain unaffected.

“Yet, the outbreak of Covid-19 as well as the nosedive in oil prices will make Iraq, our second biggest export destination, very cautious and we will be facing limitations on the commodities we can export to the neighboring country,” he added.

Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13-32% plunge in 2020 (best- and worst-case scenarios), noting that it is likely that the economic crisis awaiting the world now will be more intense than the one experienced in 2008.