Domestic Economy

Need to Diversify Export Markets

Need to Diversify Export MarketsNeed to Diversify Export Markets

As 70 percent of Iran’s exports are shipped to five countries, a shortage of export destinations is regarded as an economic weakness that should be addressed immediately, said the chairman of the Trade Promotion Organization of Iran (TPO) Tuesday.

Valiollah Afkhamirad said the number of export destinations should increase, expressing hope that the lifting of sanctions will help diversify the export targets, IRNA reported.

Iran’s main export destinations include China ($4.6b), Iraq ($2.8b), UAE ($1.9b), Afghanistan ($1.2b) and India ($1.1b).

According to reports released by the Customs Administration, total exports in the March-September period (the first half of the current Iranian year) amounted to $23.2 billion, a 20 percent increase compared to the same time last year. The figure is cut down to $16.7 billion excluding gas condensate exports, still 10 percent higher when compared to the figures from the first half of last year.

During the first six months of this year, Iran imported $26 billion of various commodities, recording a 30 percent jump compared to the same period last year.

UAE ($6.5b), China ($6b), India ($2b), South Korea ($1.9b) and Turkey ($1.9) made up 70 percent of imports to Iran in this period.

 Export Awards

The country’s top 50 exporters will be rewarded on the national day of export (October 21), according to Afkhamirad.

“This year, those inclining towards the export of techno-engineering services and products with high value added will have a better chance of claiming the top 50 awards,” he said, adding that 180 firms have already applied for the competition.

Asked about the long delay in presenting export awards for 2010 top exporters, he said, “Part of their awards has been paid, but the rest has yet to be delivered due to the government’s financial constraints.”

The High Council of Export has decided to resume presenting export awards to top performers for the current Iranian calendar year should the government fund the process.

The official further underlined the importance of gaining a foothold in international markets.

“We have a shortage of experienced businesses and companies in Iran and that’s why Iranian firms can only maintain top spots in the global export and import industry for short periods,” he said. “Unfortunately, our businessmen do not see international markets as long-term, sustainable opportunities.”

The TPO has no plans to offer cash incentives to exporters, it rather aims to reduce the final costs of products for stronger participation of Iranian manufacturers in the global markets. Subsidizing maritime transportation costs and establishing airlines and shipping lines to minimize the expenses for manufacturers are among the actions the TPO intends to take in the near future.