IRICA Expects $815 Million in Revenues in Fiscal 2020-21

EghtesadOnline: The Islamic Republic of Iran Customs Administration has earned 110 trillion rials ($450 million) in customs revenues since the beginning of the current fiscal year (March 20, 2020) and is expecting revenues projected in the budget law to materialize, says Mehdi Mirashrafi, the director general of IRICA.

News ID: ۷۸۵۹۶۰

09 February 2021

Noting that the budget has projected 120 trillion rials ($490 million) in customs revenues by the current fiscal yearend (March 20), the official said, “About 70-80 trillion rials [$285-325 million] will be generated in value added tax. All in all, IRICA’s revenues [customs duties and VAT] will reach 200 trillion rials [$815 million] by March 20,” Fars News Agency reported.

Iran’s foreign trade, excluding oil exports, stood at 122.8 million tons worth $58.7 billion in the 10-month period leading to Jan. 19.

According to Mirashrafi, exports accounted for 94.54 million tons worth $28.06 billion and imports reached 28.24 million tons worth $30.63 billion.

Compared with the corresponding period of last year, exports registered a 17.7% and 20% decline in weight and value respectively.

Imports saw a 2% and 15.5% decrease in weight and value respectively year-on-year, he was quoted as saying by ISNA.

Main Export Destinations

Main export destinations over the period included China with 22.8 million tons of non-oil goods worth $7.2 billion, Iraq with 22.3 million tons worth $6.3 billion, the UAE with 12.8 million tons worth $3.7 billion, Turkey with 5.7 million tons worth $2 billion and Afghanistan with 5.8 million tons worth $1.9 billion.

“These five countries imported an aggregate of 69.5 million tons of non-oil goods worth $21.3 billion from Iran, which account for 73.5% of the weight and 76% of the value of Iran’s overall exports over the period under review,” he said.

Major importers were again China with 2.9 million tons worth $7.9 billion, the UAE with 4.1 million tons worth $7.4 billion, Turkey with 4 million tons worth $3.4 billion, India with 1.9 million tons worth $1.8 billion and Germany with 966,000 tons of goods worth $1.4 billion.

The IRICA chief noted that an aggregate of 13.9 million tons of goods worth $21.9 billion were imported from these five countries, which account for 49% of the weight and 71.6% of the value of Iran’s total imports over the period.

“A total of 5.8 million tons of cargo were transited across the country over the period, indicating a 9.5% decline YOY,” he added.

Noting that imports of essential goods accounted for 19.5 million tons of total imports (25 essential items constituted 69% of imports in terms of weight), Mirashrafi said, “A total of 8.1 million tons of essential goods worth $9.9 billion were imported from Nov. 1, 2020, to Jan. 19, i.e., 101,000 tons per day.”

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.

A total of 25.09 million tons of essential goods worth $15.5 billion were imported into Iran during the last fiscal year (March 2019-20) to register a 20.77% and 17.13% increase in weight and value respectively compared with the year before.

According to the IRICA Spokesman Rouhollah Latifi, this amount of essential goods imports accounted for 71% and 35% of the volume and value of last year’s total imports respectively.

“The imported essential commodities included wheat, sugar, corn, rubber, barley, processed tea, rice, different kinds of seeds, red meat, soybeans, pulses, paper, fertilizers and industrial machinery,” he said.

“Iran’s one-month foreign trade from Dec. 21, 2020 to Jan. 19 stood at 12.59 million tons worth $6.8 billion compared with the previous month’s $7.4 billion.”

Exports totaled 9.34 million tons worth $2.96 billion compared with the previous month’s $3.6 billion, the Persian-language economic daily Donya-e-Eqtesad reported.

Imports during the 10th month of the Iranian year hovered around 3.24 million tons worth $3.83, compared with $3.7 billion in the preceding month.

Virus Intensifies Vulnerabilities

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, which indicate our export vulnerability,” Majid Reza Hariri, the chairman of Iran-China Chamber of Commerce, said recently.

“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 exporting items,” he added.

Hariri noted that to run the domestic production lines, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported, but due to restrictions on oil sales, this figure appears unattainable.

“Iran has to prepare for a 30% decline in export value in the current Iranian year (March 2010-21) compared with last year due to the impacts of the spread of novel coronavirus on national and international trade,” Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture’s board of directors, was quoted as saying by ISNA.

“Under the current circumstances, it is estimated that the country’s exports will fall $10-12 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 added.

Soltani, a former deputy head of ICCIMA, noted that China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, exports to this country will hopefully remain unaffected.

“Yet, the outbreak of Covid-19 and 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 scenario), noting that the economic crisis awaiting the world now will likely be more intense than the one experienced in 2008.