Iran’s mineral and mining industries’ exports to Iraq hit 21.98 million tons worth $2.59 billion in the first four months of the current fiscal year (March 21-July 22), according to a new report by the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).
In terms of value, steel manufacturing chain products (iron ore, semi-finished and finished steel) topped the list of exports to the neighboring country during the period as they accounted for 63% of total shipments in value with 2.49 million tons worth $1.65 billion.
Cement with 11.59 million tons worth $227.4 million, aluminum with 35,712 tons worth $93.22 million and stones and related products with 547,192 tons worth $75.07 million were other mineral exports from Iran to Iraq during the period.
In terms of tonnage, cement topped the list with 11.59 million tons to account for 53% of the total exports’ weight.
In the report, IMIDRO voiced concerns over recent political changes in Iraq, saying the closure of Iran’s border can have serious implications for Iran’s mining and mineral industries, especially for exporters of cement and steel.
“Iran has halted all flights, bus and rail services to Iraq for Arbaeen amid violence in Baghdad. All bus services to Iraq are put on hold until further notice,” Dariush Baqer-Javan, an official with Iran Road Maintenance and Transportation Organization, announced on Tuesday.
Referring to the presence of pilgrims stranded at the border terminals, he said, “We returned these people by car; border terminals are now empty. Passengers will be refunded.”
According to the Islamic Republic of Iran Railways, Tehran-Karbala train, which was scheduled to leave the capital city on Aug. 30 at 11:00 am, was cancelled following the closure of Shalamcheh border, News.mrud.ir reported.
“All flights to Iraq have been cancelled,” spokesperson of the Civil Aviation Organization of Iran, Mir Akbar Razavi said, adding that the organization is seeking to operate an emergency flight to return Iranian pilgrims to the country.
The Joint Operations Command in Iraq announced on Monday the imposition of a curfew after dozens of Muqtada Al-Sadr’s supporters stormed the Green Zone in Baghdad shortly after Al-Sadr announced quitting political work, Iraqi news outlets reported.
The Iraqi police used water cannons to disperse protesters from the government building and foreign embassies.
Al-Sadr’s announcement to withdraw from the political arena took place earlier on Monday after the 72-hour deadline he gave last Friday to the Iraqi Supreme Court to dissolve the parliament expired, and after the head of the Sadrist parliamentary bloc submitted an official request in this regard.
Noting that Iran’s monthly exports to Iraq averaged 1.57 million tons worth $185.31 million during the period under review, registering an 85% growth compared with the same period of fiscal 2020-21, IMIDRO said the border closure will result in a $185 million slide in Iran’s mineral exports every month.
Iraq is one of the main destinations for Iran’s mineral and mining industries’ exports.
Lion’s Share of Iran’s Tile, Ceramic Exports
Around 73% of Iran’s tile and ceramic exports go to the neighboring Iraq, according to the head of the National Tile and Ceramic Producers Guild Association.
“This is both an opportunity and a threat to our exports. We plan to keep our foothold in the Iraqi market but we also need to expand our export destinations. We are currently taking measures to include African counties in our export list,” Morteza Safdarizadeh was also quoted as saying by Fars News Agency.
The official noted that despite economic sanctions, Iranian tiles and ceramics are exported to 52 counties.
“At present, our tile and ceramic production capacity stands at 750 million square meters. The industry has created more than 450,000 direct and indirect jobs,” he added.
Afghanistan, Pakistan, Turkmenistan, Georgia, the UAE, Tajikistan, Armenia, Uzbekistan and Azerbaijan are other buyers of Iranian tile and ceramic.
Iran’s Exports to Iraq Hit $2.3b in 4 months
Iran’s exports to Iraq during the first four months of the current Iranian year (March 21-July 22) saw more than a 15% decline compared with the similar period of last year.
The secretary-general of Iran-Iraq Chamber of Commerce says there are three main reasons for the decline, with the main one being import restrictions set by Iraqi authorities.
“Every year, Iraq imposes a seasonal import ban on certain products with the aim of supporting its domestic production. These are mainly agricultural products. Usually in the second half of the year when these restrictions are lifted, our exports to this western neighbor increase,” Jahanbakhsh Sanjabi Shirazi was also quoted as saying by Fars News Agency.
The official noted that during the four months under review, Iran exported a total of 6.93 million tons of goods to Iraq worth $2.39 billion.
“Another reason for the fall in exports to Iraq during the period is the inflation in Iran caused by the removal of import subsidies, which consequently increased the prices of exports,” he said.
Shirazi also referred to the Central Bank of Iran’s mandate for exporters to sell their earnings to the government at rates lower than market prices, which in effect discourages exporters.
“Other reasons include requiring traders to use the rial instead of dollar in their transactions, and lastly the fact that Iraq’s oil revenues have increased, expanding the country’s import market. This has made many other countries enter the Iraqi market to rival Iranian exporters,” he added.
“Iran and Iraq traded 25.93 million tons of goods worth $8.64 billion since Ebrahim Raisi took office as Iran’s president on Aug. 23, 2021, as of June 21, 2022,” Rouhollah Latifi, spokesman of the Islamic Republic of Iran Customs Administration, said recently.
He made the statement on the occasion of Iraqi Prime Minister Mustafa Al-Kadhimi’s visit to Iran.
Al-Kadhimi had led a political and economic delegation from the neighboring country.
Customs data indicate that Iran’s exports to Iraq stood at 23.52 million tons worth $7.58 billion during the 10-month period. In return, Iran imported 2.42 million tons of goods worth $1.06 billion, IRNA reported.
“Historical, cultural and religious commonalities between the two nations of Iran and Iraq, and the development of bilateral political and economic relations have led to Iran's non-oil exports increasing from $145 million in the fiscal 2001-02 to $9 billion in the fiscal 2019-20. Last year’s [2021-22] exports hit 30 million tons worth $8.92 billion. In recent years, Iraq has become the second-largest export destination of Iranian goods in the world and the top destination among Iran's neighbors,” Latifi said.
He explained that Iran registered its first jump in exports to Iraq in the fiscal 2005-06 with $1.22 billion worth of shipments. The figure reached $2.76 billion in the following years.
The second jump was in the fiscal 2009-10 with $4.56 billion of exports.
The third jump was registered in the fiscal 2012-13 with $6.34 billion and the last jump was in the fiscal 2018-19 with $8.99 billion, he added.
“Iran’s imports from Iraq, which mostly included essential goods, reached a record high of 2.7 million tons of goods worth $1.2 billion in the last Iranian year [March 2021-22],” he said.
Iran's total imports during 2000-20 stood at 1.31 million tons worth $1.33 billion.
In other words, fiscal 2021-22 imports were more than the volume registered during the two decades.
Agricultural and food products, construction materials, petroleum products, electronics, medical equipment and medicine, automobiles and spare parts, clothing, bags, shoes, iron products and nuts were the main goods exported from Iran to Iraq.
Essential goods such as wheat, barley, oil, corn, soybean, rubber, paper, and cereals along with machinery, scrap metal, home appliances, electronic equipment and measuring devices were among the most important goods imported from Iraq last year.
Kermanshah in western Iran shares around 371 kilometers of borders with Iraq and its Kurdistan Regional Government.
The province accounts for around half of Iran’s annual non-oil exports to Iraq.
