Iran’s trade revenue, excluding crude oil export, hit 19.56 million tons worth $9.89 billion in the seventh month of the current fiscal year (Sept. 23-Oct. 22).
Exports stood at 15.19 million tons worth $5.27 billion, registering an 8% growth in terms of value year-on-year, according to the spokesman of the Islamic Republic of Iran Customs Administration, Rouhollah Latifi.
Trade balance stood at +$650 million during the period.
Exports in the month under review were 5% and 27% higher in terms of weight and value month-on-month, IRNA reported.
Iraq with 5.85 million tons worth $1.64 billion, China with 2.06 million tons worth $1.12, Turkey with 3.78 million tons worth $1.09 billion, the UAE with 788,000 tons worth $347 million, Afghanistan with 274,000 worth $127 million were the top five export destinations during the period.
A total of 4.37 million tons worth $4.62 billion of imported goods were cleared from customs in the month under review, registering a 64% and 48% growth in weight and value respectively compared with last year’s corresponding period.
The tonnage and value of imported goods registered an 18% and 29% decline respectively compared with the preceding month.
The imports mainly came from the UAE with 949,000 tons worth $1.29 billion, China with 373,000 tons worth $1.07 billion, Turkey with 382,000 tons worth $426 million, Switzerland with 177,000 tons worth $135 million and Germany with 37,000 tons worth $134 million.
A total of 1.09 million tons of goods were transported through Iran in transit during the period, registering a 52.5% YOY growth.
Seven-Month Perspective
Iran traded 98.7 million tons of non-oil goods worth $54.8 billion with other countries during the first seven months of the current fiscal year (March 21-Oct. 22) to register an increase of 16.5% in weight and 43% in value compared with the corresponding period of last year.
According to Mehdi Mirashrafi, the head of IRICA, exports stood at 75.2 million tons worth $27.1 billion, which shows a year-on-year growth rate of 15% and 47% in weight and value respectively.
“Iran’s imports hit 23.5 million tons worth $27.7 billion, registering an increase of 21% in weight and 38% in value compared with last year’s same period. Essential goods, machinery, industrial parts, raw materials and intermediate goods accounted for the lion’s share of imports,” he was quoted as saying by the news portal of IRICA.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
The main export destinations included China (16.9 million tons of goods worth $7.7 billion), Iraq (19.7 million tons worth $5.5 billion), Turkey (11 million tons worth $3.4 billion), the UAE (6.6 million tons worth $2.6 billion) and Afghanistan (2.8 million tons worth $1.1 billion).
Top exports mainly included natural gas, methanol, polyethylene, semi-finished steel products, liquefied polyethylene, steel ingots, rebar, urea, copper cathode and bitumen.
“Essential goods accounted for 16.6 million tons worth $11 billion of total imports, which indicate an increase of 71% in weight and 40% in value YOY. Subsidized foreign currency at the rate of 42,000 rials per US dollar were allocated to imports of 14.4 million tons of essential goods worth $8.8 billion, registering a 61% rise in weight and a 32% increase in value YOY,” the IRICA chief said.
The main exporters to Iran were the UAE (6.9 million tons of goods worth $8.6 billion), China (1.9 million tons worth $6.1 billion), Turkey (2.5 million tons worth $2.9 billion), Germany (512,000 tons worth $1 billion) and Switzerland (1.2 million tons worth $1 billion).
Cellphone devices, animal corn, wheat, soybeans, sunflower oil, soymeal, barley, rice, sugar and palm oil were the main imports during the period,
“A total of 6.94 million tons of foreign commodities were transported through Iran during the period, indicating an 81% year-on-year rise,” Mirashrafi added.
Fiscal 2020-21 in Review
Iran’s non-oil foreign trade declined from $85 billion in the fiscal 2019-20 ($41.3 billion worth of exports and $43.7 billion of imports) to $73 billion in the fiscal 2020-21 ($34.52 billion of exports and $38.5 billion of imports).
Statistics released by the Central Bank of Iran show that except in the month to Oct. 21 and the one to Nov. 20, Iran’s trade balance was negative every month last year.
The two aforementioned 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 weighing 19.26 million tons as the month to March 20 registered the highest import value with $4.57 billion weighing 2.92 million tons.
The lowest export and import values 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 the Trade Promotion Organization of Iran, there were four main reasons behind the decrease in Iran’s foreign trade in the fiscal 2020-21 compared with the years from the fiscal 2011-12 to 2013-14.
The top reason behind the decrease was the decline in oil revenues. Parts of raw material costs are met through oil revenues. The decline in revenues caused problems in the way of foreign exchange earnings and purchase of raw materials for export products. Therefore, it caused a decline in export volume during the period.
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 unpredicted shock in the fiscal 2020-21 due to the intensification of US sanctions, decline in foreign exchange reserves and the Covid-19 pandemic.
Alongside these problems, the Central Bank of Iran’s forex earnings law made some exporters unable to meet the CBI requirements, so they stopped exporting their products and waited for n the currency market and forex laws to stabilize.
The US placed sanctions on petrochemical industries and 39 related institutions, and its Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries.
Oil prices also impacted petrochemical export and due to the low oil prices in the fiscal 2020-21, alongside US sanctions, petrochemical products registered a decline during the period.
The Covid-19 pandemic was another reason behind the significant decrease in trade. Closure of borders, new standards for foreign trade and the wariness of other countries for buying exported products, especially for agricultural and food products, caused a decline in Iran’s foreign trade.
