Iran traded 100.15 million tons of goods (excluding crude oil exports) worth $52.6 billion with the Organization of Islamic Cooperation’s member states in the fiscal 2021-22 (ended March 20), latest data released by the Islamic Republic of Iran Customs Administration show.
The trade volume shows a 43% rise compared to the year before.
The UAE with 23.48 million tons worth $21.46 billion, Turkey with 19.46 million tons worth $11.39 billion and Iraq with 32.58 million tons worth $10.11 billion were Iran’s main trade partners among OIC members during the period.
Iran’s exports totaled 78.67 million tons worth $27.68 billion.
Iraq with 29.88 million tons worth $8.92 billion, Turkey with 15.74 million tons worth $6.09 billion and the UAE with 10.76 million tons worth $4.93 billion were the top export destinations.
Imports stood at 21.47 million tons worth $24.92 billion. The UAE with 12.72 million tons worth $16.53 billion, Turkey with 3.73 million tons worth $5.3 billion and Iraq with 2.7 million tons worth $1.2 billion were the main exporters.
Founded in 1969, the Organization of Islamic Cooperation is an international entity consisting of 57 member countries, including Iran, with 47 countries being Muslim majority countries. Some, especially in West Africa, have large Muslim populations that necessarily do not form a majority.
Iran’s trade with OIC members reached 82.86 million tons worth $36.66 billion in the fiscal 2020-21 with Iran’s exports at 70.49 million tons worth $21.05 billion while imports stood at 12.37 million tons worth $15.61 billion.
UAE: Iran’s Top Trade Partner
The UAE is the biggest exporter to Iran as well as a major export destination for Iranian goods.
Despite the significance of the UAE in Iran’s foreign trade, the two countries have yet to forge an agreement to avail themselves of preferential trade tariffs, says Farshid Farzanegan, former chairman of the Iran-UAE Chamber of Commerce.
“Due to geographical locations, cultural, trade and historical relations between Iran and the UAE, as well as the volume of annual imports, this country is a golden opportunity for Iranian economic players,” he was quoted as saying by Fars News Agency.
“In 2019, the UAE’s exports stood at $248 billion while its imports hit $235 billion and as the world’s 24th largest exporter and 22nd largest importer, it has a significant position in the international economy and global value chains.”
According to the former official, the UAE’s average trade volume with Iran since fiscal 2010-11 stands at $16 billion. From the fiscal 2010-11 to fiscal 2018-19, the figure stands at $13 billion.
The average annual trade volume for the eight-year period stands at $13 billion with China, $5.5 billion with South Korea, $5.5 billion with Turkey and $5 billion with Iraq, indicating that the UAE has been the leading trade partner of Iran over the years.
According to Farzanegan, Iran’s major exports to the UAE are vegetables, lead, melon, grapes, spice and cement, with each Iranian product having an over 10% share in the Emirati market.
Noting that the most important hurdle in the way of trade between the two countries is related to banking and money transfer, he said the ceiling for insurance coverage of trade between the two sides is insufficient.
“It is not possible for traders to open letters of credit. Non-existence of consortiums for export of technical and engineering services is another problem,” he said.
"This is while trade infrastructure in the UAE is very strong. Therefore, in order to develop trade relations with this country, we must upgrade and develop our infrastructure accordingly.”
He noted that Iran’s geopolitical and geoeconomic advantages allow for transport of goods from Turkey and the CIS states to the UAE.
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah en route to the Turkish port of Mersin docking at the Iranian Shahid Rajaee port in November 2021 before reaching Turkey through the Bazargan border crossing in northwest Iran.
Mohammad Hossein Rezaian, an expert in the field of transit, told Mehr News Agency that the consignment entered the port of Shahid Rajaee in southern Iran on the Persian Gulf from the UAE and reached the Turkish port of Mersin.
The expert said the new route shortens the former transit route by 12 days, meaning that it will take eight days for the shipments to reach Turkey's port through Iran from UAE's Sharjah while the previous route had to cross the Bab al-Mandeb Strait, the Red Sea and the Suez Canal and all the way to Turkey, which would take 20 days.
Noting that the UAE has zero tariff on imports of almost all types of commodities, except Iranian cement with a 5% customs duty, Farzanegan said it is necessary for Iran to facilitate import from the UAE by establishing preferential tariffs.
Iran levies high tariff rates on imports to the country, reaching as high as 40% on certain commodities.
“We practically have no preferential tariff agreement with any country. An agreement has been concluded with Turkey, negotiations have been held with Pakistan and during a recent visit of Iran’s Industries Minister Reza Fatemi-Amin to the UAE, negotiations have been held to this end, but an agreement has yet to be made.
