Exports to Neighbors Top $16b

EghtesadOnline: Iran exported $16.64 billion worth of non-oil commodities to its 15 neighboring counties during the first 10 months of the current Iranian year (March 20, 2020-Jan. 19), more than $10.7 billion of which were shipped to Arab states, according to the director general of Trade Promotion Organization of Iran’s Arab and African Affairs Bureau.

News ID: ۷۸۶۰۵۲

20 February 2021

“Topping the list of neighboring Arab countries was Iraq, to which Iran exported $6.3 billion worth of goods during the period. It was followed by the UAE with $3.7 billion, Oman with $323 million, Qatar with $134 million, Kuwait with $125 million and Bahrain with $6 million,” Farzad Piltan was also quoted as saying by IRNA.

The official noted that Iraq, the UAE, Oman, Qatar, Kuwait and Bahrain were Iran’s first, second, seventh, 10th, 12th and 14th biggest export destinations from among its 15 neighbors.

Piltan noted that no direct exports were made to Saudi Arabia over the 10-month period.

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

According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, exports accounted for 94.54 million tons worth $28.06 billion and imports 28.24 million tons worth $30.63 billion of the sum.

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 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,” Mirashrafi said.

Major exporters to Iran 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.

“These five countries exported an aggregate of 13.9 million tons of goods worth $21.9 billion to Iran, which account for 49% of the weight and 71.6% of the value of Iran’s total imports over the period,” he said.

Mirashrafi noted that a total of 5.8 million tons of cargo were transited across the country over the period, indicating a 9.5% decline YOY.

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), the official 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.

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 economic daily Donya-e-Eqtesad reported.

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

Coronavirus, Sanctions

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, all indicative of our export vulnerability," Majid Reza Hariri, the chairman of Iran-China Chamber of Commerce, was quoted as saying recently.

“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down the demand for and the prices of these exporting items.

Hariri noted that for production lines to remain operational, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported. Given the restrictions placed on oil sales, this figure seems to be unreachable, he said.

30% Export Decline Expected

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 impact of the spread of the novel coronavirus on national and international trade, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture board of directors has said.

“Under the current circumstances, it is estimated that the country’s exports will fall between $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,” Pedram Soltani was also quoted as saying by ISNA.

Soltani added 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 commodities we can export to the neighboring country,” he said.

Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13% and 32% plunge in 2020 (best- and worst-case scenarios), adding that the economic crisis awaiting the world will likely be more intense than the one experienced in 2008.