Iran exported $6.22 billion worth of goods to Turkey during the period, indicating a 5.6% decline year-on-year.
In return, the Islamic Republic imported $2.02 billion worth of Turkish goods, down 22.24% YOY.
Iran was Turkey’s 20th export destination and the seventh biggest exporter of goods to the country during the 10 months ending October, Financial Tribune reported.
Turkey mainly exports gold, steel profile, automotive parts, fiberboard and land transportation vehicles to Iran while it purchases raw petroleum materials, natural gas, plastics in primary forms and metals other than iron and organic chemicals.
“In difficult times when Iran faced sanctions and in 2012 when economic restrictions were tightened against the country, Tehran-Ankara trade reached $22 billion. After Iran’s nuclear agreement with world powers, the figure dropped to around $11 million,” Chairman of Iran-Turkey Joint Chamber of Commerce Reza Kami was quoted as saying by IRNA.
"It is predicted that with the reimposition of US sanctions against Iran, commercial interactions between the two sides will again experience an upward trend."
Kami said Turkish companies are willing to expand trade and invest in Iran, especially in northwestern regions of Iran bordering Turkey due to their common culture and language.
Mohsen Nariman, managing director of Aras Free Trade-Industrial Zone located in East Azarbaijan Province, said 60% of the companies operating in the zone are foreign companies while 30% are Turkish companies, adding that the region is free of tariffs and taxes.
He stressed that Turkey is considered the most important country for Iran from among countries exempted from US sanctions.
“We have had business relations with Turkey for many years and these relations cannot be broken,” he said.
Entitled to Temporary Sanctions Waiver
Turkey was among the eight governments granted US waivers to keep importing Iranian oil even after US President Donald Trump’s administration reimposed sanctions on Iran's energy and banking sectors as part of the decision to withdraw from the 2015 nuclear accord.
The US is demanding those countries reduce imports by a significant amount by the time the 180-day review period ends for the first round of waivers.
However, Turkey’s foreign minister objected to the Trump administration’s demand that it slash imports of Iranian petroleum products in six months, arguing that the timeframe is too tight given his country’s reliance on its neighbor for energy supplies.
“I cannot diversify my energy sources in six months or two years,” Mevlut Cavusoglu said at a briefing in Washington after meeting US Secretary of State Michael Pompeo.
“Nobody is in favor of supporting these sanctions; it is a unilateral decision of the United States.”
In November, Turkey’s energy minister said the US exemption only applies to a quarter of Turkey’s oil imports from Iran, meaning it will need to cut its purchases of Iranian crude to about 3 million tons, compared with the 11.5 million tons it bought last year.
Turkish President Recep Tayyip Erdogan also slammed the new US economic sanctions on Iran, saying Turkey will not abide as they are aimed at unbalancing the world.
“US sanctions on Iran are wrong. For us, they are steps aimed at unbalancing the world; we don’t want to live in an imperialist world,” he said.
$30b Trade Target
Iran's President Hassan Rouhani visited Turkey to meet his counterpart earlier this month.
In a joint statement issued at the end of the fifth meeting of Iran-Turkey High Council of Strategic Cooperation in Ankara, the two sides said they will support efforts aimed at raising annual bilateral trade to $30 billion from the current $11 billion.
They stated that this target can be achieved by providing further support to the joint economic commission, carving out new areas of cooperation, creating an environment more conducive to investment, facilitating the transit of goods and engaging the private sectors of the two countries, the Iranian president’s website reported.
Admitting that sanctions hinder monetary transactions, Kami said the founding of an Iran-Turkey joint bank by the private sector will help us overcome this situation.
“The Turks have agreed to the establishment of this bank. They have already begun the process and are now waiting for the Central Bank of the Republic of Turkey to issue the required permit,” he said.
Following talks between the two presidents, the governor of the Central Bank of Iran said important developments in banking and trade will take place.
According to CBI's website, Abdolnasser Hemmati, in a meeting with his Turkish counterpart, said boosting commercial ties and facilitating banking relations were discussed.
“The Turkish leader has a positive opinion about banking relations between the two nations and insisted on solving financial and banking relations between two countries," he said.
Using National Currencies in Trade
Erdogan was earlier quoted as saying that his country will start using local currencies in trade with Iran.
“Linking world trade, particularly with the US dollar, is posing a big problem day after day,” Erdogan was quoted as saying at the Kyrgyz-Turkish Business Forum held in the Kyrgyz capital, Bishkek, on Sept. 2.
He stressed the need to end US dollar domination over trade exchange gradually by dealing in local currencies.
“Countries, companies and traders have to cope with the difficulties linked to the US dollar, the exchange rate pressures and difficulties arising from the nature of the trade itself,” he said.
In addition to Iran, Erdogan also noted his intention to take the same measure (using local currencies in trade) with China and Russia.
Latest IRICA Data
Latest data released by the Islamic Republic of Iran Customs Administration show 2.05 million tons of non-oil goods worth $2.5 billion were traded between the two neighboring countries during the first eight months of the current Iranian year (March 21-Nov. 21), indicating a 59.33% and 28.93% decline in tonnage and value respectively YOY.
Turkey was Iran’s sixth trading partner in the world. Iran’s exports reached 1.24 million tons worth $959.16 million, down 67.06% and 32.92% in tonnage and value respectively YOY, while Turkey’s exports to Iran were at 812,090 tons worth $1.56 billion, down by 36.62% and 26.13% in tonnage and value respectively YOY.
Turkey was Iran’s fourth export destination as well as the second exporter of goods to Iran among neighboring nations. It was Iran’s sixth export destination and the seventh exporter to Iran.
Non-alloy zinc, non-alloy aluminum, bitumen, urea and polyethylene grade films were Iran’s main goods exported to Turkey, while Turkey exported cooking bananas, tobacco, fibers, cotton and auto parts to Iran.