Iran Exports to Qatar Up 60%

EghtesadOnline: Iran exported 737,500 tons of non-oil goods worth $67.5 million to Qatar during the five months to August 22, registering 30.8% and 60.57% growth in terms of volume and the value respectively compared to the same period last year.

News ID: ۷۷۸۸۱۵

27 August 2017

Islamic Republic of Iran Customs Administration’s daily trade data show significant growth in the value of exports to the neighboring Arab emirate since June when Saudi Arabia, the UAE, Bahrain and Egypt severed diplomatic ties and cut land, sea and air links with the tiny nation.

Iranian businesses, especially in the food sector have been striving to expand ties with the Qataris following the rift engineered by the regime in Saudi Arabia.

However, Iran is not the only country seeking a bigger footprint in the Qatari market. Qatar Chamber of Commerce recently announced that it has signed 15 trade agreements with Turkey. Turkey is said to be holding trilateral talks with Iran and Qatar to ease transit of goods via Iran, according to Financial Tribune.

Pakistan is in too, having launched a direct shipping line to Qatar, alongside Azarbaijan, which is also trying to build closer trade with the Persian Gulf Arab country.

The rush and convergence of several neighboring countries wanting to sell to the Qataris plus cumbersome domestic rules have raised concern among traders that Iran has failed to rise to the occasion.  Lack of a timely an efficient roadmap for boosting export and transportation links, banking limitations, and the low quality of domestic products are among the impediments to increasing exports to the Arab neighbor.

However, IRICA data show that about $24.6 million worth of goods, mostly food products, were exported to the country during the Iranian month to August 22. The figure was $20 million in the earlier month – a sign that Iran has not only not failed but is in fact gradually gaining a foothold in the small country.

Challenges

Following the Arab political crisis, a large number of Iranian traders started to ship food to the Persian Gulf state. However, Iranian goods did not have the necessary traction in that market as they were not made for being exported.

Back in July, the Trade Promotion Organization of Iran and representatives of the Iranian food industry held a meeting with Qatar Chamber of Commerce to discuss the expansion of ties.

After that the TPO said any business wanting to enter the Qatari market will have to acquire a permit from the organization, emphasizing that exports to Qatar must be of high quality, Sobhanonline.ir reported.

The TPO is also set to hold talks with organizations involved in the trade process to finalize an incentive package for exporters to Qatar.

Iran's Exclusive Food Exhibition will be held in Doha on September 10-13.

Lack of efficient shipping services between the two neighbors is another sticking point. Valfajr Shipping Line, affiliated to the Islamic Republic of Iran Shipping Lines has said it will launch a direct shipping route between Bushehr Port in the south and Doha.

Valfajr has not established the route yet, but a private shipper, Pasargad Lines, has launched a direct route from Bandar Abbas to the capital of the island state.

The governor of the Central Bank of Iran has suggested that negotiations are underway to link Iran and Qatar bank cards. No details have been released.

Qataris’ Interest

Qatar said on Wednesday it was returning its ambassador to Tehran, nearly 20 months after it downgraded relations with Iran in a show of solidarity with Saudi Arabia.

Doha also expressed its desire to forge Tehran relations in "all fields", in a statement published on the website of the Qatari Foreign Ministry.

It has recently facilitated business trips for Iranian businesses by issuing six-month visas.

Qatar’s Chamber of Commerce also expressed readiness to act as a bridge between Iranian businesses and their Qatari counterparts and help boost ties between the private sectors of the two countries.

Prospects

Arash Shahraini, a board member of Export Guarantee Fund of Iran, believes that Iran has the potential to become a reliable business partner for Qatar.

“But Iran first needs to come up with measures to secure a long-term presence in that country,” he told the Financial Tribune.

“Steel accounts for 5% of Qatar’s total imports . . . Iranian steelmakers in the southern provinces should focus on the Qatari market.”

He points to the low risk of trading with Qatar and says the EGFI (Iran’s state-owned export credit agency) is willing and able to cover exports to the neighbor.

About 207,000 tons of the total exports (worth $18 million) were sent to the neighboring country during the fourth month of Iranian year (ended July 23). Iran exported 97,000 tons of goods worth $3.9 million to Qatar during the same period last year.