Trade With Turkey Tops $3.4b

EghtesadOnline: Iran and Turkey traded $3.43 billion worth of goods in 2020 to register a decline of 45.82% compared with 2019.

News ID: ۷۸۵۹۴۹

08 February 2021

According to the latest data of Turkish Statistical Institute, Iran exported $1.19 billion worth of goods to the neighboring country last year to register a 66.9% year-on-year decline.

Imports from Turkey stood at $2.245 billion, down 17.97% YOY.

Turkey’s total value of exports in 2020 stood at $169.48 billion, down 6.3%. The country’s imports amounted to $219.39 billion, up 4.3% compared with 2019, IRNA reported.

Despite the decline in yearly trade, mostly as a result of Covid-19 pandemic, bilateral exchanges in December stood at $502.6 million, marking a 35% YOY growth.

Iran’s exports to Turkey accounted for $185 million of the figure, up 49% YOY, while Turkey’s exports to Iran stood at $317.1 million, up 28.9% YOY.

Monthly trade between Iran and Turkey fell to under $300 million in September, mostly due to a fall in Iran's exports to the neighboring country. However, the figure made a significant jump in December, raising hopes of recovering from the impact of Covid-19 on trade between the two countries.

Iran exported more than $1.192 billion worth of goods to Turkey in 2020 to register a 66.9% year-on-year decline while imports from Turkey stood at $2.245 billion, down 17.97% YOY.

“A total of 59,474 trucks have carried Iranian goods to their export destinations from Bazargan Border Crossing located in West Azarbaijan Province’s Maku County since the beginning of the current Iranian year on March 20, 2020, to register a 45% decline compared with the similar period of last year,” Jaber Akbarzadeh, a local official, said in January.

The exports mainly included agricultural, petrochemical, stone and metal products.

Akbarzadeh noted that 67,659 trucks carried imported goods into the country through Bazargan over the same period, registering a 52.16% year-on-year drop.

The imports included industrial machinery, paint, metal structures, different types of fabric and auto spare parts.

Out of Iran’s 22 border crossings, Bazargan in Maku, Razi in Khoy, Sarv in Urmia, Sanam Baqi in Poldasht and Tamarchin in Piranshahr are located in West Azarbaijan Province.

Bazargan is a city and capital of Bazargan District in Maku County and is the most important Iranian land border for conducting trade with Turkey.

To stem the spread of Covid-19 in March, Turkey shut its border gates with neighboring countries, including Iran and Iraq.

The Bazargan border initially opened for trade in May, but restrictions were applied regarding incoming and outgoing truck traffic.

According to Spokesman of the Islamic Republic of Iran Customs Administration Rouhollah Latifi, 60 Iranian trucks per day were allowed to transfer export products to Turkey as per new agreements from May 5.

Presently, according to Akbarzadeh, 420 trucks cross the border daily.

Trucks started arriving at border gates after Trade Minister Ruhsar Pekcan announced in June that Turkey has reopened the Gurbulak border gate with Iran (known as Bazargan on the Iranian side of the border).

Trucks from Iran started arriving at the Gurbulak customs gate after the announcement and were to enter Turkey after the completion of necessary procedures. Turkish trucks looking to enter Iran also started arriving at the border gate.

Strict measures such as lockdowns and border closures deeply affected the country's exports, particularly to Europe, its top export market, and the Middle East.

Goal Set for 1m Tons of Rail Freight Transport in 2021

Roughly 1 million tons of cargo are to be transported via railroad between Turkey and Iran this year, Turkish authorities said recently.

The Transport and Infrastructure Ministry of Turkey said in a statement that a recent memorandum of understanding signed in a gathering of rail representatives in Turkey's capital Ankara on Jan. 12-13 would open a new era for the transit railroad, Anadolu Agency reported.

Despite the coronavirus pandemic, three train services ran daily between Turkey and Iran in 2020, transporting 564,000 tons of cargo, according to the statement.

The statement also announced that freight trains would also run between Turkey and Pakistan via Iran on a common tariff devised by the three countries. It added that talks are still ongoing to set this tariff.

With a recently completed railroad between Iran and Afghanistan, it will now also be possible to transport freight between Turkey and Afghanistan.

"After the rail connection between Iran and Afghanistan was completed on Dec. 10, 2020, it became possible for a wagon loaded in Turkey to transit Iran to Afghanistan," he said.

The rail administrations of Turkey, Iran and Afghanistan will come together in the coming months to set the course for rail transport between Turkey and Afghanistan.

The statement noted that efforts were underway for a cargo transportation corridor through Iran between Europe and China.

Islamabad-Tehran-Istanbul Train Services in 2021

The Islamabad-Tehran-Istanbul freight train is expected to resume operations in early 2021 to boost Pakistan’s trade with Turkey and Iran.

The railroads of Pakistan, Turkey and Iran have mutually agreed to resume regular operations soon, said Turkey’s Transport Minister Adil Karaismailoglu, after the 10th edition of the Economic Cooperation Organization’s Transport and Communications Ministers Meeting in Istanbul, Pakistani media outlet Islamabad Scene reported.

The key requirements for the revival of the ITI train, also called the ECO Container train, have been fulfilled. The train is expected to resume operations in 2021.

The trial run of the ITI train was launched in 2009 as a project under the Economic Cooperation Organization, the 10-member Asian trade bloc. The rail route, which is recognized by the UN as an international corridor between the three countries, has so far been used for the pilot journey.

The railroad intends to greatly reduce the transit route of goods from Istanbul to Islamabad. During the trial, the freight train from Islamabad to Istanbul took nearly 13 days to make the 6,500-km journey. The journey was later further reduced to 11.5 days.

In comparison, transporting goods from European countries to Pakistan via sea took almost 45 days. The train has a maximum capacity of twenty 40-feet containers.

The total length of the Islamabad-Tehran-Istanbul project is 6,500 kilometers, comprising

- Iran: 2,600 km

- Turkey: 1,950 km

- Pakistan: 1,990 km

The railroad from Istanbul, through Tehran, all the way to Islamabad has been described as “tremendously beneficial” for all three nations. It aims to boost economic cooperation among Pakistan, Iran and Turkey first and with the other ECO member countries afterwards.

Besides Pakistan, Turkey and Iran, the following countries will also benefit from the ITI project: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

Although the project was launched to promote economic relations among the ECO founding member countries, it offers a short, safe and affordable route for transportation of goods between Asia and Europe, extending benefits to several regional countries.

From Turkey, the corridor can link up with the European rail networks via Istanbul’s 76-km-long undersea Marmaray rail tunnel.

Other countries earlier also expressed eagerness to join the project and suggested further linkup with the European and Middle East markets.

Highlights of the Islamabad-Tehran-Istanbul Rail Corridor include services that boost cargo and container transport capacity: 20 containers of 40 feet, estimated travel time of 11 days compared to 45 days via sea and over 30% reduction in rail fares as opposed to those charged on traditional routes.