Economy, Domestic Economy

Iran’s Agro Exports to Russia Booming

Iran’s Agro Exports to Russia Booming Iran’s Agro Exports to Russia Booming

Iran’s export of agricultural and food products to Russia is burgeoning. The boom partly owes to Moscow’s moving away from Turkey and Europe due to political tensions.

The Russian government has banned imports from Europe amid tensions over the crisis in Ukraine and from Turkey as a result of the downing of a Russian aircraft by a Turkish jet November last year.

A direct flight route has been launched between Tehran and Astrakhan for facilitating Iran’s exports, including agricultural products and seafood, to Russia, says Deputy Agriculture Minister Hassan Salehi.

“We are going to have the first flight within the next three days,” he was quoted as saying by Mehr News Agency on Monday.

He added that close to 1,000 tons of shrimps, trout and canned fish were exported to Russia over the past Iranian year (March 2015-16).

Seafood exports are estimated to reach 90,000 tons in the current Iranian year (March 2016-17), indicating a 9% increase, according to Issa Golshahi, an official with Iran’s Fisheries Organization.

The official also noted that European countries plan to resume their purchases from Iran.

“Italy, Spain, France and Germany are willing to import Iran’s shrimp, trout, caviar, tuna and lobster,” he said.

Iran exported close to 82,000 tons of seafood worth $304 million last year.

Kalleh Dairy Company, based in the northern Mazandaran Province, exported its first shipment of 20 tons of milk powder to Russia on Sunday after it secured the approval of Russia’s Federal Service for Veterinary and Phytosanitary Surveillance for the export of dairy products.

“The Iranian dairy company is also exporting different types of cheese to Russia in the coming days,” said director general of Mazandaran Veterinary Service, Hossein Rezvani.

Iran exported its first shipment of 12 tons of hard cheese to Russia early in March with another similar consignment shipped in late April. Market research firm Euromonitor International ranks Kalleh among the world’s top 50 brands, just two places behind Nutella and two above noodles-producer Maruchan. The company also has factories in the Iraqi cities of Karbala and Najaf.

Three memoranda of understanding were signed between the head of Iran Customs Administration, Masoud Karbasian, and his Russian counterpart, Andrey Belyaninov, on Monday.

The agreements include establishment of a “green corridor” to ease Iran’s agricultural exports to the neighboring country, mutual administrative cooperation and exchange of customs’ valuation information.

Russia recently floated the idea of Green Corridor for exporting Iranian agricultural products to the neighboring country, which is “primarily aimed at substituting sanctioned Turkish products,” in Russian Deputy Agriculture Minister Sergei Levin’s words.

Levin said the corridor will become operational “at full strength” by the end of 2016.

“These agreements are a hopeful sign that Iran will become the replacement for the countries Russia used to trade with,” Karbasian was quoted as saying.

The Iranian official also spoke of a trilateral cooperation agreement involving Russia, India and Iran in the near future and said the agreement would be a major step toward the establishment of a customs union between the troika and the Republic of Azerbaijan and the eventual accession of Iran to the Commonwealth of Independent States.

For his part, the Russian official said traders of his country are willing to boost transactions with their Iranian counterparts.

“The two countries are determined to improve trade, particularly those dealing with perishable food, and their presidents have delegated this great responsibility to their respective customs bureaus.”