Iran Prioritizes Export Commodities for Iraq

EghtesadOnline: Iran has listed the commodities that should be prioritized for export to neighboring Iraq.

News ID: ۷۸۲۳۱۸

11 April 2018

As reported by IRNA citing the Ministry of Industries, Mining and Trade, top priorities include industrial machinery and equipment; medicines and health equipment; food products; detergents and cosmetics; textile; petrochemical and basic oil products; construction materials; electrical home appliances; cellular products; chemicals and minerals; fruits and ornamental plants; livestock products; industrial and herbal plants; leather; and metal products.

According to Iran’s commercial attaché in Baghdad, Nasser Behzad, Iraq imports close to $1.50 billion worth of industrial machinery and equipment, while Iran has a 5% share in this regard.

“Considering the start of reconstruction in Iraq and the need for such machinery, Iraq’s machinery imports are predicted to reach $3 billion in 2018,” Financial Tribune quoted him as saying.

Behzad noted that poor marketing is currently the main impediment to the stronger presence of Iranian businesspeople and traders in Iraq.

In a meeting with Iraqi officials in Baghdad in March, Iran’s first vice president, Es’haq Jahangiri, said Iran is ready to allocate a credit line amounting to $3 billion to Iraq for rebuilding the war-ravaged areas of the neighboring country.

Jahangiri was quoted as saying that the credit line will be given so that “Iranian companies and its private sector can have a more serious cooperation in rebuilding Iraq.”

Iraqi officials say rebuilding the country after three years of war with the self-styled Islamic State terrorist group will cost more than $88 billion, with housing a particularly urgent priority.

Director General of Iraq’s Planning Ministry Qusay Adulfattah told an international donors’ conference in Kuwait last month that about $23 billion will be needed in the short term and more than $65 billion in the medium term.

The conference was aimed at discussing efforts to rebuild Iraq’s economy and infrastructure, as it emerges from a devastating conflict with IS terrorists who had seized almost a third of the country.

Iraq declared victory over IS in December, having taken back all the territory captured in 2014 and 2015.

The seven provinces attacked by the militants suffered $46 billion in direct damage, including the destruction of 147,000 housing units, and the security forces suffered losses worth $14 billion.

Tens of billions more were lost indirectly through damage to the wider economy and years of lost growth, according to the Iraqi Planning Ministry.

Iraq has published a list of some 157 projects, for which it is seeking investment. They include rebuilding destroyed facilities such as Mosul airport and new investments to diversify the economy away from oil sales, developing transport, agriculture and oil-related industry, including petrochemicals and refining.

Iran’s Foreign Minister Mohammad Javad Zarif, who also attended the conference, said Iran’s long history of business and construction activity in neighboring Iraq gives it an edge over other countries competing for stakes in projects to rebuild the war-ravaged country.

“Iranian firms, including road construction and technical-engineering services companies, were operating in Iraq at a time when few other countries were active in rebuilding the country. This indicates that we have a comparative advantage to be seriously involved in Iraq’s reconstruction,” he said.

Zarif noted that Iranian firms are geared up to undertake projects offered by Iraq’s public and private sectors.

Iran exported $5.57 billion worth of non-oil goods to Iraq during the 11 months to Feb. 19, the secretary-general of Iran-Iraq Chamber of Commerce told Financial Tribune recently.

Hamid Hosseini added that foodstuff, fruits, vegetables and construction materials were the main commodities exported to Iraq from Iran during the 11-month period.

The average price of Iran’s exports to Iraq stood at $460 per ton during the 11 months, which is 1.2 times higher compared with the average price of Iran’s overall exports.