Exports hit 27.88 million tons worth $11.61 billion, indicating a 15.58% increase in value as imports amounted to 8.37 million tons worth $11.25 billion, down 2.76% in value year-on-year, the latest report by the Islamic Republic of Iran Customs Administration showed.
IRICA categorizes non-oil exports into three groups of petrochemicals, gas condensates and “others”.
A total of 6.5 million tons of petrochemicals worth $3.5 billion were exported in the first quarter to register a rise of less than 1% in value compared with the same quarter of last year, Financial Tribune reported.
Petrochemical products accounted for more than 30% of Iran’s total non-oil exports in Q1.
Exports of gas condensates stood at $1.55 billion or 13% of total exports, posting more than a 2.5% decline YOY. Other main exports categorized in this group included liquefied propane ($534 million accounting for more than 4.5% of total exports), light oils except gasoline ($409 million or more than 3.5% of total exports), polyethylene ($306 million or 3% of total exports) and liquefied petroleum gases ($304 million).
Exports of products classified as “others” fell in the neighborhood of 18.38 million tons worth $6.55 billion, which account for more than 56% of total non-oil exports.
China, the UAE, Iraq, Afghanistan and South Korea were the main customers of Iranian products in Q1.
Exports to China and the UAE saw more than a 6.08% and 43.5% rise in value to hit $2.24 billion and $2.12 billion respectively during the period under review.
The looming reimposition of US sanctions against Iran's economy seems to be the reason behind the significant growth in exports to the UAE, as the neighboring Arab country is likely to reclaim its intermediary role in Iran’s exports.
Iraq, Afghanistan and South Korea’s imports from Iran totaled $1.76 billion, $788 million and $748 million, respectively. The first quarter’s exports to Iraq increased by more than 10% while exports to South Korea decreased by 15.25%. Exports to Afghanistan grew by 21.95% YOY.
The average price of each ton of exported commodities hovered around $417, up 17% compared with last year’s corresponding period.
Imports mainly included auto parts ($541 million accounting for about 5% of total imports), field corn ($436 million or about 4% of total imports), rice ($375 million or more than 3%), soybeans ($373 million or more than 3%) and mobile phones ($192 million or close to 2% of total imports).
Major exporters to Iran in the first quarter included China with $2.93 billion, the UAE with $1.69 billion, South Korea with $712 million, Germany with $573 million and Turkey with $551 million. Imports from China saw about a 15% increase while imports from the UAE, South Korea, Germany and Turkey decreased by 21%, 4%, 11% and 24% respectively.
The average price of each ton of importing commodities hovered around $1,344, up 0.5% compared with last year’s same period.
> Trade Deficit in Khordad
Iran’s non-oil foreign trade during 31 days ending June 21, which marks the end of the Iranian month of Khordad, stood at $8.33 billion.
Exports amounted to $3.87 billion while imports reached $4.45 billion to register a trade deficit of $577 million in the final month of Q1.
This comes as exports in the previous Iranian month, Ordibehesht (April 21-May 21) stood around $4.6 billion while imports were $4.26 billion to post a $338 million trade surplus.
Foreign trade stood at $8.51 billion during last year's corresponding month (May 22-June 21, 2017), with exports and imports reaching $3.7 billion and $4.8 million respectively to post a trade surplus of $1.1 billion.
A report by the Persian daily Donya-e-Eqtesad laid the blame for trade deficit in Khordad this year on the new foreign currency policy adopted by the government since April 9, the day President Hassan Rouhani’s administration decided to unify Iran’s dual foreign exchange rates to prevent the further depreciation of its currency.
One of the 16 measures approved by the Cabinet following the forex unification decision that set the US dollar rate at 42,000 rials stipulates that “all exporters are obligated to repatriate currency proceeds from their exports to the country’s economic cycle based on the framework that will be devised by the Central Bank of Iran”.
On April 23, First Vice President Es’haq Jahangiri officially notified the process of repatriation that obligates exporters to return 95% of their currency yields by accepting imported items, reimbursing currency debts, selling foreign currencies to banks and exchanges, or making deposits in banks within two months of receiving their customs export permit. A “pricing committee” with IRICA will handle and update export prices.
Exporters are allowed to keep the remaining 5% to spend it on marketing, advertisement and other costs. They have also been mandated to report their activities in an online system specifically devised for this purpose and will face disciplinary action if they fail to repatriate their earnings.
The detailed mechanism of the mandatory currency repatriation and the recently introduced “secondary” foreign exchange market where the US dollar can be traded at a rate other than the official unified rate of 42,000 rials still remain unclear, which has left exporters of items categorized as “others” who constitute 20% of all non-oil exporters at a loss.
IRICA’s figures show the export of items other than petrochemicals and gas condensates i.e. items included in “others” group, has decreased from $2.74 billion in Ordibehesht to $2.16 billion in Khordad.
Importers and their appetite for subsidized foreign currency allocated by the government for some items have also driven up imports, resulting in the negative trade balance registered for the month of Khordad.
Moreover, the government moved to ban this month imports of 1,339 commodities categorized as “non-essential goods with domestic counterparts”.
The no-import list includes cars and auto parts, refrigerators and freezers, automatic folding cabin doors of elevators, farm tractors, milk powder, ambulance, range hoods, stoves, ovens, tea- and coffee-makers, cameras and musical instruments, among others.
The move is said to be aimed at saving foreign currency.