Iran Non-Oil Trade Surplus Tops $920 Million in 7 Months (Mar-Oct 2018)

EghtesadOnline: Iran posted a foreign trade surplus of $926 million for the seven-month period ending Oct. 22, the head of Islamic Republic of Iran Customs Administration said.

News ID: ۷۸۴۲۸۴

31 October 2018

Foroud Asgari added that Iran’s non-oil foreign trade from March 21, the beginning of the current fiscal year, to October 22, which marks the end of Iranian month Mehr, stood at $53.5 billon,

Non-oil exports hit 67.36 million tons worth $27.22 billion in the seven-month period, indicating a 13.35% rise compared with the same period of last year.

Imports of 18.92 million tons of non-oil goods worth $26.3 billion during the period show an 11.7% decline year-on-year, Financial Tribune reported.

The exports mainly included gas condensates, liquefied propane, light oils except gasoline, methanol and polyethylene while imports constituted field corn, auto parts, rice and soybeans, IRNA quoted the customs chief as saying.

Currency Devaluation Factor

Much as Iran's national currency's steep devaluation in recent months has led to many challenges, it has also provided a boost to the country's trade balance on the back of surging exports and dwindling imports.

Before May, when US President Donald Trump was expected to deal a blow to Iran's nuclear deal with world powers, the rial started to lose value against other currencies due to psychological factors such as anxiety over worsening conditions.

The exports mainly included gas condensates, liquefied propane, light oils except gasoline, methanol and polyethylene while imports constituted field corn, auto parts, rice and soybeans

The national currency lost about 75% of its value and reached an all-time low of 190,000 against the US dollar late September. It has since regained some lost ground, thanks to government intervention and now stands at about 140,000 against the American greenback.

This has created a myriad of issues from fostering an atmosphere of uncertainty toxic to stable economic endeavors to rising inflation. However, one rare implication has been a boost to Iran's trade balance.

Another major contributing factor to the amelioration of trade balance has been the government's ban on imports of around 1,400 categories of consumer goods in the wake of the currency crisis that ensued after the US move to leave the nuclear deal. The move was aimed at economizing on foreign currencies.

Despite the decline in imports, the customs administration registered its highest midyear revenues on record for the six-month period to Sept. 22.

IRICA earned a total revenue of 108 trillion rials ($776.97 million) in the six-month period from import tax and duties, including the letters of guarantee it received from importers.

H1 cash revenues stood at 73.4 trillion rials ($528.05 million), excluding letters of guarantee, despite a nearly 13% decline in imports and the government’s ban on imports of 1,400 consumer goods, particularly cars.

The improvement of customs monitoring systems and equipment, introduction of electronic systems and the impressive performance of customs staff across the country are the main reasons behind the significant growth in IRICA revenues, the report said.

A total of 16.22 million tons of non-oil goods worth $22.18 billion were imported into Iran in H1, down by more than 9% in weight and 12% in value over last year’s similar period.

The imports mainly included auto parts ($978 million accounting for more than 4% of total imports), rice ($964 million/4% of total imports), field corn ($961 million/4% of total imports), soybeans ($705 million/3% of total imports) and graphite electrodes used in furnaces ($287 million/1% of total imports).

Major exporters to Iran during the period included China with $5.5 billion (25% of the value of Iran’s total exports), the UAE with $3.15 billion (14% of Iran’s total imports), South Korea with $1.43 billion (6% of Iran’s total imports), India with $1.37 billion (6% of Iran’s total imports) and Germany with $1.17 billion (5% of Iran’s total imports).

H1 imports from all these countries declined compared with the similar period of last year. Imports from China dropped by 4%, those from the UAE fell by 30%, South Korea by 17%, India by 2% and Germany by 14%.

The average price of each ton of imported commodities hovered around $1,368 in H1, down 3% compared with last year’s same period.