Domestic Economy

Trade Ends Summer on Upbeat Note

Trade Ends Summer on Upbeat NoteTrade Ends Summer on Upbeat Note

A look at the latest figures released by the Islamic Republic of Iran Customs Administration shows foreign trade rallied in the Iranian month of Shahrivar (August 23-September 22, 2015) and registered a 24% growth compared to the previous month.

Imports of agricultural products were replaced by industrial parts, pharmaceuticals and cars causing a 28% rise in the value of imports. Some experts believe the shift is indicative of revival in the country’s economy, however the increased imports of cars pose a threat to domestic production, Donya-e-Eqtesad reported.

Based on the figures released by IRICA for the first half of the year, experts believe the exports’ rebound in Shahrivar is the result of the booming agricultural sector. The last month of H1 is the harvest time of strategic fruits such as pistachio.  Iran’s trade stood at $7.496 billion, of which imports and exports accounted for $3.941 billion and $3.555 billion respectively. Therefore, Iran’s trade balance, which hovers around $386, is heading deeper into the negative territory compared to the $165 million deficit of the previous month.

IRICA’s figures for the sixth month of the Iranian year suggest that the value of imports outstripped the value of exports. This is while in the five-month period ending August 22, the value of exports was more than that of imports. Furthermore, a 17% drop in trade volume was recorded for the first six months of the year compared to the corresponding period of last year. Reasons behind this declining trend could be traders and producers’ inaction in the wait for complete removal of sanctions, falling energy prices and the ensuing fall in the global value of goods, particularly petrochemical products, stability of foreign currency rate and the declining prices of minerals.

Iran’s trade in the first half of the year was $41.346 billion where exports and imports stood at $20.494 billion and $20.852 billion respectively. It seems that 54% of the $77 billion non-oil export goal set for this year has been materialized. It is worth noting that a $50-billion trade volume was registered for the same period of last year. In terms of value, exports and imports experienced a decrease of more than 14% and 20.5% respectively.

Exports of natural gas condensates, which account for 19.65% of the total value of exports, had a 2% drop in terms of weight and 40% decline in terms of value.

Also, exports of petrochemical products, which constitute 34.78% of the total value of Iran’s exports, had a 0.02% drop in terms of value despite having a 35.74% growth in terms of weight.

Exports of the so-called “other non-oil goods” category, constituting 45.57% of the total value of country’s exports, were down 19% in weight and 7% in value.

The global falling oil prices have affected both the petrochemical products’ prices and goods such as grains and food.

Major non-oil exports, excluding gas condensates, during the period included liquefied petroleum gases, hydrocarbons and liquefied propane (15.26%), polyethylene (9%), oil grease and bitumen-based grease (4.86%) and polycyclic aromatic hydrocarbons (4.71%).

There are also unprecedented imported goods in the list released by IRICA such as industrial goods and pharmaceuticals. The main imports during the period included corn for cattle feed (3.17%), tractor and automobile parts (2.89%) pharmaceuticals (2.55%) and cars (2.38%).

China (22.65%), Iraq (18.68%), the United Arab Emirates (16.99%), India (8.3%) and Afghanistan (7.7%) were the main export destinations of Iranian products, whereas the majority of imports came from China (25.24%), the United Arab Emirates (19.98%), South Korea (8.93%), Turkey (7.72%), and India (6.11%).