Preferential Tariffs Threaten Iraq Petrochem Share

Preferential Tariffs Threaten Iraq Petrochem SharePreferential Tariffs Threaten Iraq Petrochem Share

Pursuant to the new preferential import tariffs ratified by the Ministry of Industries, Mining and Trade, the rise in petrochemical exports from Turkey has led to a reduction in production of downstream units.

Consequently, demand for domestic petrochemical products has declined, which is no good news at all, Reza Mohtashamipour, head of Downstream Petrochemical Industries, said.

According to the official, statistics are indicative of the fact that during the last three months, production in upstream industries has been satisfactory. Nevertheless, auxiliary industries have lagged behind due to a wide range of reasons, the most important of which have been violation of export quotas and reluctance of private firms to invest in the sector, Mehr News Agency reported.

"Establishing the corridor to export Turkish petrochemical products to Iraq has resulted in a dramatic decrease in Iran's import to the target market. Furthermore, Turks are crowding Iran out of Iraq's market gradually, particularly in the Kurdistan region." Mohtashamipour said.

"The downward trend in oil prices has caused an intense competition among petrochemical producers. However, due to a sharp fall in oil prices, there is no competition in Iran's market as foreign brands are less expensive than domestically-manufactured goods."

In spite of the fact that Iran enjoys a great capacity in manufacturing petrochemical products because of the abundance in much-needed feedstock, Iran's market seems to be saturated with foreign brands resulting in the loss of  another lucrative market.