Iran's total non-oil exports stood at 113.67 million tons worth $35 billion while imports hit 33.74 million tons worth $38.89 billion in the fiscal 2020-21, according to the latest statistics released by the Central Bank of Iran.
The data show Iran’s trade balance was negative during the period under review, except in the months ending Oct. 21 and Nov. 20. The two months registered a trade surplus of $1.42 billion and $0.12 billion respectively.
The highest export value was registered in the month to Oct. 21 with $4.67 billion while the month to March 20 registered the highest import value of $4.57 billion.
The lowest export and import were registered in the month to April 19 with $1.65 billion weighing 5.35 million tons and $1.93 billion weighing 2.53 million tons respectively.
According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, Iran’s main exports included gasoline, natural gas, polyethylene, propane, and pistachio, with the latter alone earning $1.2 billion.
“The main export destinations were China with 26.6 million tons worth $8.9 billion, Iraq with 25.6 million tons worth $7.3 billion, the UAE with 15.2 million tons worth $4.6 billion, Turkey with 6.3 million tons worth $2.5 billion and Afghanistan with 7 million tons worth $2.2 billion. These five countries imported more than 80 million tons of non-oil goods worth $25.7 billion,” he was quoted as saying by Mehr News Agency.
China, Iran’s biggest trading partner, accounted for 26% of Iran's total non-oil exports, as 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period. Pistachio, nuts, minerals, construction materials, methanol, carpet, iron ore, glassware and fruits were the main types of goods exported from Iran to China in the last fiscal year.
Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 21, 2021, to account for 10.6% of the total volume of Iran's imports and 25.3% of the total value of imports during the period. Industrial machinery and raw materials, medical equipment, paper, wood, textile, auto parts and sports equipment were Iran's main imports from the South Asian state in the fiscal 2020-21.
“Iran’s foreign trade reduced by 25 million tons due to sanctions and the Covid-19 pandemic,” he said, adding that the country’s trade deficit stood at $4 billion.
Mirashrafi noted that 23.1 million tons of essential goods, including corn, cellphones, rice, soybean meal, oilseeds, wheat and unprocessed oils worth $12 billion were imported during the period under review.
Iran imported 3.5 million tons of essential goods worth $9.7 billion from China, 5 million tons worth $9.6 billion from the UAE, $4.3 billion from Turkey, 2.2 million tons worth $2.1 billion from India and 1.2 million tons worth $1.8 billion from Germany in the year to March 20.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
TPO on Foreign Trade Decline
There were four main reasons behind the decrease in Iran’s foreign trade in the fiscal 2020-21 compared with the years from fiscal 2011-12 to 2013-14, according to the Trade Promotion Organization of Iran.
The first reason behind the decrease was the plunge in oil revenues. Parts of raw material costs are supplied by oil revenues. The decline in revenues caused problems in the way of foreign exchange earnings and buying raw materials for export products. Therefore, it caused a decline in the volume of exports during the period under review.
Currency shock is another reason behind the decline. One of the main variables affected by currency shocks is non-oil exports. Iran’s currency market faced an unprecedented shock in the fiscal 2020-21 due to the intensification of US sanctions, the decline in foreign exchange reserves and the Covid-19 pandemic.
Alongside these problems, the Central Bank of Iran’s forex earnings law made it difficult for exporters to meet the CBI requirements, so they stopped exporting their products and waited for the currency market and forex laws to stabilize.
The US placed sanctions on petrochemical industries and 39 related institutions, and the US Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries.
Due to the low oil prices and US sanctions, petrochemical products registered a decline in the period under review.
Coronavirus pandemic was another reason behind the significant decrease in trade. Closure of borders, new standards for foreign trade and the wariness of other importers, especially of agricultural and food products, caused a decline in Iran’s foreign trade.
Iran and the US are holding indirect talks on a return to compliance to the 2015 Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action. Representatives of Britain, China, France, Germany, Russia and European Union shuttle between US and Iranian delegations. The JCPOA limited the scope of Iran's nuclear program. In return, the Islamic Republic received relief from US and international sanctions. Washington walked out of the deal under the administration of former president, Donald Trump.
With the possible agreement between the two countries and lifting of sanctions, some of these obstacles such as the US sanctions may be removed and there is an opportunity for Iran to develop and increase its foreign trade.
Fiscal 2021-22 Trade on Growth Path
The first two months of the current Iranian year (started March 21) has seen a reversal of last year’s decline in foreign trade.
Iran’s foreign trade reached 22.2 million tons worth $12.8 billion in the month leading to May 21, indicating a 6.6% and 38% growth in weight and value respectively compared with the same period of last year, Mirashrafi said on Wednesday.
“A total of 16.9 million tons of non-oil goods worth $6.3 billion were exported. Gasoline, polyethylene, methanol, steel ingot and other steel products were Iran’s main exports during the month [April 21-May 21],” he said.
“Exports increased by 17% in terms of weight and 48% in terms of value year-on-year. Top export destinations during the month under review were China with 4.6 million tons of non-oil goods worth $2 billion (up 17% in tonnage and 74% in value YOY), Iraq with 3.1 million tons worth $953 million (down 18% in weight and 13% in value), the UAE with 2.4 million tons worth $849 million (up 9% in weight and 25% in value), Turkey with 384,000 tons worth $388 million (up 14% in weight and 172% in value) and Afghanistan with 911,000 tons worth $365 million, indicating a decline of 14% in weight but an 8% increase in value,” he was quoted as saying by ISNA.
“Exports to these five countries amounted to 11.5 million tons of non-oil goods worth $4.6 billion. They accounted for 68% and 73% of Iran’s overall exports in terms of weight and value, respectively.”
The official noted that imports reached 5.3 million tons worth $6.5 billion, indicating a 16.5% decline in weight but a 29.5% growth in value compared with the corresponding period of last year.
“Cellphones, corn, sunflower oil, soybean meal, wheat, soybeans, rice, barley, sugar and unprocessed soybean oil were Iran’s main imports last month. The import of these 10 items totaled 3.7 million tons worth $2.1 billion and accounted from 69.5% and 33% of the country’s overall imports in terms of weight and value,” he said.
Top exporters to Iran were the UAE with 1.4 million tons of goods with $1.8 billion, China with 461,000 tons of goods worth $1.5 billion, Turkey with 581,000 tons of goods worth $642 million, Germany with 156,000 tons of goods worth $285 million, and Switzerland with 359,000 tons of goods worth $283 million.
“Imports from the UAE rose by 114% and 181% in weight and value compared with last year’s same month while imports from Turkey decreased by 48% in weight and 42% in value, imports from Germany dropped by 54% and 15% in weight and value, and imports from Switzerland surged by 2,642% in weight and 2,061% in value compared with the same month of last year,” he said.
“These five countries exported a total of 2.96 million tons of goods worth $4.54 billion to Iran during the month under review to account for 55% of the country’s overall imports in weight and 70% of its imports in value.”
A total of 1.84 million tons of cargo were transited across the country during the second month of the current year, indicating a 142% increase YOY, he concluded.
Iran’s non-oil foreign trade in first month of the current Iranian year (March 21-April 20) stood at 10.34 million tons worth $5.76 billion, indicating an increase of 32% and 62.5% respectively in weight and value compared with the corresponding period of last year.
According to IRICA, exports accounted for 8.3 million tons worth $2.96 billion and imports constituted 2.04 million tons worth $2.79 billion of the total sum.
Exports show an increase of 56% in weight and 80% in value while imports registered a decline of 18% in weight but an increase of 47% in value year-on-year.
