Iran traded 559,735 tons of goods (excluding oil exports) worth $612.94 million with Latin American countries during the first 10 months of the current Iranian year (March 21, 2022-Jan. 20), latest data released by the Islamic Republic of Iran Customs Administration show.
Iran exported goods to only 13 Latin American countries and imported from 11 of 33 Latin American countries during the period.
Trade with Brazil stood at 457,473 tons worth over $396.62 million, for the Latin American country to top the list of Iran’s partners in the region. It was followed by Venezuela with 48,886 tons worth $113.76 million and Argentina with 49,048 tons worth $84.78 million.
Iran’s exports totaled 193,642 tons worth $187.73 million during the period under review.
Venezuela topped the list of export destinations among Latin American states with 48,881 tons worth $113.06 million. It was followed by Brazil with 138,885 tons worth $71.23 million and Argentina with 4,930 tons worth $1.95 million.
Imports, which stood at 366,093 tons worth $425.21 million during the period under review, mainly came from Brazil and amounted to 318,588 tons worth $325.39 million. Argentina followed with 44,117 tons worth $82.82 million and Cuba with 188 kilograms worth $11.85 million.
Iran traded 1.73 million tons of non-oil goods worth $1.25 billion with Latin American countries in the fiscal 2021-2.
Trade with Brazil stood at 1.36 million tons worth $737.77 million.
Brazil’s Agriculture Minister’s Iran Visit
Brazil’s Minister of Agriculture, Livestock and Supply Tereza Cristina travelled to Iran last year.
Cristina was in Tehran to sign agreements with Iran’s National Petrochemical Company and work on prospects of tripling Iran’s urea shipments to Brazil, MercoPress reported.
NPC President Morteza Shahmirzaei said urea exports to Brazil could in the short term reach 2 million tons a year, while the volume currently shipped is 600,000 tons annually.
Cristina confirmed Brazil's interest in importing more Iranian urea and highlighted the quality of the Iranian fertilizer used to supply nitrogen to crops.
“This arrangement guarantees that Brazil is in a position to receive enough imports from Iran to step up our agro-industry. Through this partnership, we will ensure the strategic purchase of these inputs to secure efficient, continuous food production,” she said.
The NPC president highlighted that the company has other petrochemical products ready to supply to the market.
NPC is a subsidiary of the Iranian Ministry of Petroleum, responsible for developing and overseeing the Iranian petrochemical sector. It is currently the second-largest producer and exporter of petrochemical products in the Middle East.
The Brazilian minister visited Shiraz Petrochemical Company, one of the country’s main urea manufacturers. Iran’s annual urea production is estimated to be over 5 million tons, most of which is for the domestic market and the remainder is exported.
During a reception at the Brazil-Iran Business Forum in Tehran, the minister stated that with the import of soy-derived products, corn and meat, Iran has become the largest client of Brazilian agricultural products in the Middle East.
However, Brazil is interested in expanding its exporting portfolio to include cotton, rice and sugar, she added.
Brazil is prepared to increase purchases of Iranian walnuts, chestnuts and dried fruits, and acquire other products such as saffron, pistachio and wheat.
“I am confident that we will pursue the right path to overcome any eventual adversity and intensify bilateral trade for our mutual benefit,” she said.
Cristina underlined that barter trade is an excellent option for shipping grains and other commodities to Iran and, in the same vessels, return with urea and other petrochemicals to Brazil.
“Brazilian trading companies are experienced in such operations, and thus work with more attractive prices,” she added.
The Brazilian minister also highlighted Iran’s interest in soil and water management technologies plus irrigation systems. In this context, Brazil has a long experience, and cooperation between Embrapa and Iran's Agricultural Research, Education and Extension Organization can boost cooperation on these issues.
Latin America is a group of 20 countries and 13 dependencies in the Western Hemisphere where Spanish, French and Portuguese languages are predominantly spoken. The region covers an area stretching from the northern border of Mexico to the southern tip of South America, including the Caribbean.
Latin America Faces a Third Shock: IMF
As Latin American countries continue to grapple with the effects of two previous shocks, the pandemic and Russia’s invasion of Ukraine, they face a third shock: the tightening of global financial conditions, according to the International Monetary Fund.
Growth momentum is currently positive, reflecting the return of service sectors and employment to pre-pandemic levels, and the overall support of favorable external conditions such as high commodity prices, strong external demand and remittances, and rebounding tourism. This has led to several upward revisions to growth this year.
But financing is becoming scarcer and costlier, as major central banks raise interest rates to tame inflation. Capital inflows to emerging markets are slowing and external borrowing costs are increasing. Domestic interest rates in emerging markets are also rising, as their central banks are hiking rates to battle inflation as well, but also because of reduced investors’ appetite for riskier assets.
For Latin America, these factors result in a deceleration in activity as higher borrowing costs weight on domestic credit, private consumption and investment.
Earlier this year, surging commodity prices and solid growth momentum helped offset the effects of tighter global financial conditions, as investors were attracted by a region that hosts major commodity exporters amid global needs for food and energy supplies. But higher interest rates are pushing commodity prices down as the global economy decelerates, reducing their cushioning effect. The slowdown may also reduce exports, remittances and tourism to the region.
Uncertainty about global interest rates and whether inflation can be brought back under control smoothly — the so-called “soft landing” — means spikes in volatility and investor risk aversion are also possible. In other words, the transition to higher global interest rates may be bumpy.
