Iran's Trade With Latin America Crosses $700m in 8 Months

EghtesadOnline: Iran traded 1.16 million tons of non-oil commodities worth $733.32 million with Latin American countries during the current fiscal year’s first eight months (March 21-Nov. 21), latest data released by the Islamic Republic of Iran Customs Administration show.

News ID: ۷۸۷۵۰۳

26 December 2021

Trade with Brazil stood at 928,2280 tons worth $404.86 million, for the Latin American country to top the list of Iran’s partners in the region.

It was followed by Argentina with 207,073 tons worth $287.15 million, Venezuela with 17,426 tons worth $32.53 million, Mexico with 569 tons worth $2.31 million and Ecuador with 2,481 tons worth $1.78 million.

Iran’s exports totaled 310,665 tons worth $133.2 million during the period under review.

Brazil topped the list of export destinations among Latin American nations with 291,677 tons worth $144.22 million. It was followed by Venezuela with 17,286 tons worth $15.4 million, Mexico with 356 tons worth $1.68 million, Argentina with 410,089 tons worth $823,841 and Chile with 371 tons worth $408,556.

Imports, which stood at 847,555 tons worth $600.12 million during the period under review, mainly came from Brazil with 636,743 tons worth $290.64 million, Argentina with 206,663 tons worth $286.32 million, Venezuela with 140 tons worth $17.13 million, Ecuador with 2,460 tons worth $1.78 million and Peru with 752 tons worth $1.14 million.

Iran traded 110.3 million tons of goods (excluding crude oil exports) worth $63.1 billion during March 21-Nov. 21, registering a 43.5% and 40% year-on-year growth in weight and value respectively, according to Mehdi Mirasharfi, the head of the Islamic Republic of Iran Customs Administration.

Exports stood at 83.7 million tons worth $31.1 billion, 10.5% and 42% higher in terms of weight and value respectively YOY, IRNA reported.

Petrochemical exports with 39.8 million tons worth $13.3 billion had the biggest share in exports, accounting for 47% of total weight and 43% of total value.

China with 19.3 million tons worth $9.1 billion, Iraq with 21.6 million tons worth $6.1 billion, Turkey with 11.3 million tons worth $3.8 billion, the UAE with 7.3 million tons worth $2.9 billion and Afghanistan with 3 million tons worth $1.27 billion were the top five export destinations.

Imports stood at 26.5 million tons worth $32 billion, registering a 38% and 21% increase in weight and value respectively.

Top five exporters to Iran were the UAE with 8 million tons worth $10.1 billion, China with 2.2 million tons worth $7.2 billion, Turkey with 2.7 million tons worth $3.2 billion, Germany with 549,000 tons worth $1.2 billion and Switzerland with 1.3 million tons worth $1.1 billion, respectively.

Latin America is a group of 20 countries and 13 dependencies in the Western Hemisphere where Spanish, French and Portuguese languages are predominantly spoken. The region covers an area stretching from the northern border of Mexico to the southern tip of South America, including the Caribbean. It is spread over approximately 19,197,000 square kilometers – almost 13% of the Earth's land surface area.

According to the Organization for Economic Cooperation and Development, despite rapid and well-targeted policy action to respond to the pandemic, Latin America and the Caribbean have been the most affected region in the world in socioeconomic terms. Although positive growth is expected in 2021, per capita gross domestic product is not expected to return to pre-crisis levels before 2023-24. The impact of the crisis has been asymmetric, particularly affecting the most vulnerable groups. Poverty and extreme poverty levels have not been so high for the past 12 and 20 years, respectively. Demand policies, mainly through non-conditional cash transfers as well as other innovative measures, provided rapid support to public health systems, households and firms.

Without this response, the losses in lives and increase in poverty and inequality would have been much steeper. Without government transfers to mitigate the loss of labor income, the Gini Index would have increased by 5.6% with respect to 2019, instead of the 2.9% recorded.

Joint Chamber of Commerce With Brazil

Iran-Brazil Chamber of Commerce was inaugurated in a meeting held in the presence of Iranian and Brazilian officials and parliament members, Mehr News Agency reported on Saturday.

Addressing the gathering, Iran's ambassador to Brazil, Hossein Gharibi, expressed satisfaction with the inauguration of such an institution for Iranian and Brazilian private sectors.

He called for the preservation, expansion, stabilization and diversification of relations between the two sides.

Brazil is an influential member of Mercosur, the envoy said, adding that Iran also boasts a good market and can facilitate relations between Mercosur and Eurasian countries.

Mercosur (in Spanish), Mercosul (in Portuguese), or Ñemby Ñemuha (in Guarani), officially Southern Common Market, is a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since 1 December 2016. Associate countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname.

Mercosur's purpose is to promote free trade and the fluid movement of goods, people and currency. Since its foundation, Mercosur's functions have been updated and amended many times; it currently confines itself to a customs union, in which there is free intra-zone trade and a common trade policy between member countries.

In 2019, Mercosur had generated a nominal gross domestic product of around $4.6 trillion, placing the bloc as the fifth economy of the world. The bloc places high on the human development index. It has signed free trade agreements with Israel, Egypt, Japan and the European Union, among others.

Ahmad Naderi, the head of Iran-Brazil Parliamentary Friendship Group said with the opening of the chamber, exports from Iran to Brazil will increase to balance trade between the two countries as imports from the South American country currently outweighs exports.

He noted that Brazil is the eighth largest economy in the world and Iran's most important trading partner in the Americas.

Call for Normalization of Trade Tariffs With Brazil

Iran annually imports more than $5 billion worth of essential goods from Brazil at a customs duty rate of up to 4% while the Islamic Republic’s exports to the South American country is less than $100 million per year, says Fakhreddin Amerian, the head of Iran-Brazil Chamber of Commerce, adding that Brazil imposes over 100% in duties on Iranian exports.

Speaking to ILNA, Amerian called on parliamentarians to pass a bill for the formation of a preferential trade agreement between the two countries with the aim of cutting Brazil’s import tariffs on Iranian goods for a more balanced bilateral trade regime.

“Iran can boost its export of petrochemical products, gasoline, pistachio, raisins and dates to Brazil,” he added.

The official noted that Iran imports 50-60% of its essential goods from Brazil.

Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.