Iran's Non-Oil Foreign Trade Tops $42b

Exports stood at 70 million tons worth $20.94 billion to register a 22.5% growth in weight but a 10.55% year-on-year decrease in value compared with the same period of last year. 

Imports reached 16.56 million tons worth $21.22 billion, indicating an increase of 0.41% in weight and a decline of 5.51% in value year-on-year. 

As trade deficit of around $280 million was registered in H1, Financial Tribune reported.

China, Iraq, Turkey, the UAE and Afghanistan were Iran’s main export destinations over the period.

Exports to China stood at $5.1 billion, accounting for 24.37% of total exports.

Iraq imported $4.66 billion worth of non-oil goods from Iran, accounting for 22.26% of Iran’s overall exports.

Exports to Turkey stood at $2.55 billion to account for 12.18% of Iran’s total exports.

Non-oil goods sold to the UAE were worth $2.35 billion, constituting 11.25% of Iran’s overall exports. 

Exports to Afghanistan reached $1.07 billion. The neighbor to the east accounted for 5.13% of Iran’s total exports during the period under review.   

Major exporters to Iran were China with $5.3 billion and a share of 25%, the UAE with $3.78 billion and a share of 17.81%, Turkey with $2.61 billion and a share of 12.34%, India with $2.12 billion and a share of 10.02% and Germany with $1.01 billion and a share of 4.77% from Iran’s total imports.

Iran’s non-oil trade with the world during the month ending Sept. 22 stood at $6.63 billion, indicating a year-on-year decline of 8.3%.

Exports amounted to 9.27 million tons worth $3.14 billion for the month while imports reached 2.44 million tons worth $3.48 billion to register a trade deficit of $340 million for the country, according to a report by the Persian daily Donya-e-Eqtesad, citing IRICA data. 

The fiscal month ending Sept. 22 saw the country’s non-oil trade increase by 0.3% compared with the trade turnover of $6.61 billion registered for the month before. During the month ending Aug. 22, Iran’s non-oil export stood at $3.19 billion and imports hovered around $3.42 billion.

By “non-oil”, IRICA refers to all commodities except crude oil. Therefore, oil-driven products and byproducts as well as petrochemical products are still categorized as non-oil.  

IRICA categorizes non-oil exports into three groups of “petrochemicals”, “gas condensates” and “others”.

Sanctions Impact

The decline in trade comes as last year the United States unilaterally walked out of the nuclear deal Iran had signed with world powers, including with the US, in 2015 and reimposed a series of sanctions described as "toughest ever" against the Islamic Republic with the aim of choking off Iran's trade, particularly oil, with the world by obstructing banking transactions with the Islamic Republic and scaring off trading partners.

The deal, better known as the Joint Comprehensive Plan of Action, saw the removal of international sanctions against Iran. In exchange, the country agreed to limit the scope of its nuclear program.

The return of sanctions battered the Iranian economy after an initial boost as a result of JCPOA and its implementation in 2016. As a result, the Iranian government adopted ad-hoc trade policies to cushion the effect of sanctions.

One such measure was to ban the import of a wide range of goods as of last year with the primary aim of economizing on foreign currency reserves. The measure especially pertains to commodities that have domestic counterparts.

Minister of Industries, Mining and Trade Reza Rahmani said the ministry plans to reduce the volume of imports by $10 billion by the Iranian year 1400 (2021-2).

According to Rahmani, $1.2 billion worth of imports are planned to be cut in textile and apparel industry, $500 million in cellulose, $2.7 billion in chemicals, $2.4 billion in minerals, $600 million in metals, $650 million in home appliances, $650 million in machinery, $1.4 billion in automotive and $250 million in electrical appliances on the back of indigenizing imports.

Trade Balance With Major Partners

A new report by Tehran Chamber of Commerce, Industries, Mines and Agriculture has reviewed Iran's trade balance with three of its major trading partners, namely China, Turkey and the UAE, during the five months.

The report shows Iran registered a trade surplus with China and Turkey, while suffering a trade deficit with the UAE during the period under review.

Iran exported $4.4 billion worth of non-oil commodities to China during the five months, registering an increase of 16% year-on-year.

Imports from China stood at $4.3 billion, down by 10% YOY. The figures indicate Iran registered a trade surplus of $100 million with China.

Iran’s exports to Turkey saw a staggering 257% YOY rise to $2.4 billion, while Turkey’s exports to Iran went up by 138% to $2.2 billion. 

A trade surplus of $200 million was registered with Turkey.

However, Iran’s trade with the UAE registered a deficit of around $1.3 billion, as the Arab country exported $3.04 billion worth of commodities to Iran and imported $1.7 billion in return.