Iran's Trade With Russia Rises to $1.6b

EghtesadOnline: Iran’s trade with Russia stood at 3.5 million tons worth $1.66 billion in the current fiscal year’s first nine months (March 21-Dec. 21), registering a 12% and 41% year-on-year growth in weight and value respectively, according to Rouhollah Latifi, spokesman of the Islamic Republic of Iran Customs Administration.

News ID: ۷۸۷۶۶۷

22 January 2022

Export stood at 838,602 tons worth $432.88 million, registering a 15% and 29% growth in weight and value year-on-year, respectively.

With 447,133 tons worth $267.24 million, food and agricultural products accounted for 4% of the weight and 62% of the value of Iran’s total exports to Russia during the period.

Imports stood at 2.73 million tons worth 1.22 billion, registering an 11% and 45% YOY growth in weight and value respectively.

With 2.42 million tons worth $967.38 million, livestock feed, food and agricultural products accounted for 88% of the total weight and 79% of total imports from Russia.

Iran’s Biggest Trade Partner in EEU

Iran and Russia traded $2.5 billion worth of goods in the last Iranian year (March 2020-21).

Imports from Russia stood at $2 billion during the period, registering an increase of 19% compared to the previous year, while Iran’s exports to Russia increased by 10% year-on-year to nearly $510 million.

According to IRICA, trade with Russia accounted for 77% of Iran’s total trade with the Eurasian Economic Union in the last fiscal year.

EEU is an international economic union and free trade zone comprising countries located in central and northern Asia and Eastern Europe. The founding member states of Russia, Belarus and Kazakhstan established the union by treaty in 2014 and officially implemented the agreement as of Jan. 1, 2015.

It is estimated that nearly 200 million people are living in the member states and that EEU countries have $5 trillion in combined GDP, according to Investopedia.

EEU was created partly in response to the economic and political influence of the European Union and other Western trade agreements. The key objectives of the organization are to increase cooperation and economic competitiveness for member states and promote development in order to raise the standard of living in member states.

Iranian exports to the Eurasian Economic Union member states will be exempt from customs tariffs as of September 2022, Amir Abbas Afsharamin, managing director of Iran-EEU Export Consortium Center, said recently.

The interim free trade agreement between the Eurasian Economic Union and Iran has been extended until 2025, the official representative of the Eurasian Economic Commission, Iya Malkina, told a press briefing after the Supreme Eurasian Economic Council meeting on Dec. 10, BelTA has learned.

"During the summit, the parties signed a protocol to the interim agreement leading to the formation of a free trade zone between the Eurasian Economic Union and Iran," Iya Malkina said.

"The interim agreement has been extended until Oct. 27, 2025, or until the free trade agreement enters into force, whichever comes first."

She recalled that negotiations on the full-fledged free trade agreement are based on the interim agreement in force between EEU and Iran since October 2019. In H1 2021, trade with Iran posted high growth, such that exports of EEU member states surged by almost 47% to total $1.35 billion, as imports increased by 34% to $825 million. Trade between EEU countries and Iran increased by 27% over the same period in 2019, such that exports rose by 27% and imports by almost 70%.

Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran into EEU. The arrangement, which lowers or abolishes customs duties, is the first step toward implementing free trade between Iran and the five members of the union.

Largest Grain Importer From Russia

Iran became Russia's largest grain importer, importing 3.7 million tons of grain in the agricultural year from July 1, 2021, to June 30, 2022, according to analytical company Prozerno.

"For the first three months of the new season 2021-22, exports to Iran from Russia amounted to 3.697 million tons of grain, including 3.091 million tons of wheat, 392,600 tons of barley and 215,300 tons of corn. Thus, Iran reached first place not only among importers of Russian wheat and corn but also in the overall standings for all grain types," the statement said.

Experts estimate that Turkey purchased 3.523 million tons of Russian grain, including 2.87 million tons of wheat, 569,200 tons of barley and 73,100 tons of corn. Egypt came in third place with 1.69 million tons of wheat, TASS reported.

The Russian Ministry of Agriculture earlier reported that grain exports in the 2021-22 agricultural year decreased by 21.3% and amounted to 13 million tons as of Oct. 14. At the same time, the volume of wheat exports for the season decreased by 18% and amounted to 11.1 million tons, barley dipped by 34.9% to 1.5 million tons and corn declined by 56.5% to 0.2 million tons.

According to the ministry’s forecast, for the current agricultural year, grain exports may amount to 45-48 million tons. Agricultural exports from Russia amounted to 48 million tons in 2020-21, including 38.4 million tons of wheat.

Raisi in Russia

Iranian President Ebrahim Raisi wrapped up his working visit to Moscow and left Russia, the Iranian Embassy told TASS on Thursday.

"The embassy can confirm that the president of Iran wrapped up the program of his visit to Moscow and left the Russian Federation," the embassy said.

The president had arrived in Russia for an official visit on Jan. 19. His meeting with Russian President Vladimir Putin became the first since Raisi assumed office. On Thursday, Raisi delivered a speech in the Russian State Duma.

Tehran gave Moscow a draft of a 20-year strategic cooperation agreement following talks between Putin and Raisi. The Russian head of state noted that Russia and Iran are closely cooperating in many areas. In recent years, trade between the two countries has increased.

According to experts interviewed by Izvestia, pressure from the West, which both states are experiencing, could push Moscow and Tehran toward closer cooperation, even in the security sphere.

"We handed over to our Russian colleagues a document on strategic cooperation between our countries, which can determine prospects for at least 20 years," he said.

According to the Iranian president, the current level of bilateral trade and economic relations is not satisfactory.

"We can increase the level of our trade and economic cooperation by several times. We would like our relations with Russia to be strengthened and comprehensive. These relations won’t be short-term or positional but long-term and strategic," Raisi said.

In addition, he thanked his Russian counterpart "for facilitating Tehran’s entry into the Shanghai Cooperation Organization".

Putin highlighted the growing trade between the two countries, pointing out that in 2021, it had exceeded $3.3 billion.

Raisi said further development of bilateral relations can be facilitated with the conclusion of a comprehensive agreement on strategic partnership. He also encouraged the Russian leader to unite against the backdrop of sanctions pressure from Washington and its allies.

Given the extensive souring of relations between Russia and the United States, there is no doubt that Moscow will strengthen ties with Iran, orientalist Vyacheslav Matuzov told Izvestia.

The commentator does not rule out that they can even transform into allies, since Russia and Iran are under pressure that goes beyond international law.

"This is pushing Russia, Iran and China, as well as other countries to work together more closely in order to protect themselves from lawlessness," the expert emphasized.

According to political scientist Roland Bidzhamov, in the current situation, Russia and Iran need to conclude an agreement on strategic partnership.

"This will help foster cooperation in various fields, including the economy. At the same time, Moscow and Tehran need to switch to settlements in national currencies," he said.

The Russian and Iranian sides reached agreements on the participation of Russian companies in oil and gas projects in the republic, Iran’s Oil Minister Javad Owji said on Thursday.

"We have reached agreements with a number of major Russian companies on their participation in the development of oil and gas fields, the construction of oil refineries, the transfer of technologies and [supply of] equipment necessary in the sector," he was quoted as saying by IRNA.

"We will see the results [of those agreements] in the energy sector soon," the minister added, without giving further details.

Russian Deputy Prime Minister Alexander Novak met with Owji on Jan. 18 in Moscow, after which he said that the two countries "were already implementing a number of large projects in the energy and other sectors of the economy, with promising projects in the wings”.