As trade with Azerbaijan, Turkmenistan and Iraq has either stalled or fallen, the Ministry of Industries, Mines and Trade—the body in charge of balancing trade and increasing exports—is seeking to reverse this trend by paving the way for traders and officials to meet and negotiate more often.
Abbas Khaleqitabar, head of the ministry’s Market Research Department, says the ministry aims to organize as many meetings as possible among representatives of Tehran, Baghdad, Ashgabat and Baku, because “many foreign traders are not familiar with the Iranian market and the same is true about Iranian traders’ understanding of overseas markets.”
Khaleqitabar believes that trade opportunities for Iran in these countries are many, noting that low tariffs allow Iranian traders to enter various segments of the markets in Turkmenistan and Iraq.
“Azerbaijan is also a good export market for Iranian pharmaceutical and personal care products,” Fars News Agency quoted him as saying.
Iran has lately been organizing a lot of meetings with traders and officials from Turkmenistan and Azerbaijan.
Khaleqitabar stressed the importance of naval, road and railroad connections with these countries for increasing bilateral trade in future. Over the past 10 years, imports from the two northern neighbors have seen gradual declines. On the other hand, Tehran has increased exports to Turkmenistan. However, the ministry believes the export potential is much larger.
According to Khaleqitabar, Turkmenistan plans to build facilities for the production of liquid gas. Hence, the country is in dire need of appropriate infrastructure for a new pipeline network—a field of expertise Tehran could easily deliver.
Additionally, imports from Turkmenistan mostly consisted of gas. As domestic gas production has started to warm up, Iran has been able to reduce gas imports.
“The increase in Iran’s gas output will probably lead to less dependence on gas imports from Turkmenistan. In turn, that opens up the opportunity for cooperation to increase gas transit to Turkey and Armenia,” said the official.
He added that Turkmenistan also needs investment in its communications industry—a sector where Iran could offer a great deal of help, noting that lower tariff rates for Iranian products make for an important factor in opening up opportunities.
Trade relations with oil-producing Azerbaijan have been more complicated. While Baku’s share of total Iranian imports was particularly large a decade ago, this trend has somewhat reversed.
According to Khaleqitabar, total trade volume between Iran and Azerbaijan has dropped by half over the past 10 years. He stated that the main import needs of Azerbaijan include machinery, petroleum and steel products as well as foodstuffs.
Including oil and gas products, up to $6.2 billion worth of goods were exported to Iraq in the year ending March 2015. The export volume amounted to 17 million tons.
Trade balance with Iraq is heavily stacked in Iran’s favor, with only $63 million worth of goods having been imported from Iraq in this period. This implies an export to import ratio of almost 100 to 1. The most important export products include livestock, sunflower and animal oil, soft drinks, mineral products, chemical products, plastic, wood, cement and construction materials.
Despite the great potential in the Iraqi market, ever since the country was plunged into conflict in 2011, Iranian traders have found it difficult to reach some areas; instead they have been focusing their attention on Baghdad and the south of the country. These factors have caused exports to stall, although they picked up again the last Iranian year.
