Iran exported $13.37 billion worth of non-oil goods to its 15 neighboring countries during the first eight months of the current Iranian year (March 20-Nov. 20), more than $8.57 billion of which went to Arab states, according to the director general for Arab and African affairs with the Trade Promotion Organization of Iran.
“Iraq and the UAE were Iran’s first and second export destinations from among its neighbors. Oman, Kuwait, Qatar and Bahrain came ninth, 10th, 11th and 14th,” Farzad Piltan was quoted as saying by IRNA.
The official added that no exports, or imports, were made to and from Saudi Arabia during the period under review.
According to the official, due to the proximity of Arab countries to Iran, suitable port facilities, cost-effective marketing and lower expenses of taking part in exhibitions and other commercial events, as well as cultural, religious and linguistic commonalities, TPO aims to expand trade with Arab countries in the region.
Overall Trade at $44.6b
Iran’s non-oil foreign trade hit 97.7 million tons worth $44.6 billion in the eight months leading to Nov. 20.
According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 75 million tons worth $21.5 billion and imports constituted 21.8 million tons worth $23.1 billion.
“Compared with the corresponding period of last year (March 21-Nov. 21, 2019), exports registered a 14% and 19% decline in weight and value respectively. Imports saw a respective 1% and 18% decline in weight and value year-on-year,” he was quoted as saying by IRNA.
Imports of essential goods accounted for 15.2 million tons (70%) of total imports.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
Amid high inflation and diminished purchasing power, the Iranian government has sought to ensure a steady supply of essential goods at subsidized prices.
Noting that pistachio was Iran’s fourth biggest export during the period, IRICA chief said, “Each kilogram of pistachio was exported at $6, compared with the average 30 cent per kilogram of Iran’s exports.”
The top exporter to Iran was China with $6 billion. Iraq stood above China by a narrow margin when it comes to exports from Iran. The neighboring country began to overtake China as Iran’s biggest destination since two months ago.
Three border crossings with Iraq, namely Chazzabeh and Shalamcheh in southern Khuzestan Province and Mehran in the western Ilam Province reopened for exports during all weekdays as of Sept. 12
Previously, amid the spread of the new coronavirus, customs procedures were carried out only on Sundays and Wednesdays at most border terminals with Iraq, except at Khosravi in western Kermanshah Province, which was open to trade during all weekdays, according to Rouhollah Latifi, the spokesperson of the Islamic Republic of Iran Customs Administration.
Chazzabeh was the last of seven official border crossings between the two countries that reopened after about six months following the outbreak of coronavirus.
“At the beginning of its reopening in late July, 30 trucks were allowed to cross the border. Now 170 trucks carry mainly vegetables and construction materials to the neighboring country via Chazzabeh each day,” Latifi said.
“Each day, 300 trucks of Iran’s private sector carry fruit and vegetables, cucurbits, food, construction materials, minerals and steel products to Iraq through Shalamcheh into the neighboring country,” Ali Mousavi, an official with Arvand Free Trade Zone, said.
A total of 329,000 tons of commodities worth $183 million were exported from Mehran border crossing in the western province of Ilam during the first half of the current Iranian year (March 20-Sept. 21).
“The exports come as Mehran was closed down for three whole months due to the outbreak of the Covid-19. Two months after the outbreak, the border was opened for two days per week only,” Rouhollah Gholami, director general of Ilam Customs Administration, was quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.
The official noted that around 48,169 tons of agricultural products worth more than $24.78 million were exported to neighboring Iraq from Mehran border crossing during the six-month period.
“Other main exported products were foodstuff, plastic artifacts, glass products, automotive spare parts, steel, tiles and ceramics and construction material,” he said.
According to Gholami, an average of 300 trucks carrying Iran's export goods cross Mehran border to Iraq every day.
Last year (March 2019-20), he said, exports form Mehran checkpoint stood at $1.18 billion.
Iraq closed its international borders and provincial boundaries in March, except for the delivery of essential goods such as food, as it sought to curb the spread of the coronavirus.
Iran exported more than 25.68 million tons of goods worth $8.99 billion to Iraq in the last fiscal year (March 2019-20).
Iran also exports to Iraq through border crossings with the Kurdish region of the neighboring country, namely Bashmaq, Parvizkhan and Tamarchin, which have been open all along the coronavirus pandemic.
Amid restrictions imposed by the Iraqi government on cross-border trade due to the spread of the new coronavirus, Iran has been directing the bulk of its exports to the neighboring country through borders with the Iraqi Kurdistan.
About 8.1 million tons of goods worth $3.8 billion were exported from Iran to Iraq through the Iraqi Kurdistan Region during the last fiscal year that ended on March 19, according to the spokesman of the Islamic Republic of Iran Customs Administration.
“Exports account for 42% of Iran’s total exports to Iraq in terms of value and for over 31% in terms of tonnage during the period under review,” Latifi said.
According to Superintendent of Kurdestan Customs Administration Bakhtiar Rahmanipour, 90% of Kurdestan Province's foreign trade passes through Bashmaq, located in Marivan County of the province.
Coronavirus, Sanctions
Global trade has dropped by 30% following the outbreak of coronavirus and Iran was no exception.
“Seven countries, including China, Iraq, Afghanistan, the UAE and India, account for 75% of our foreign trade; over 50% of Iran’s non-oil exports are headed to Iraq and China, all indicative of our export vulnerability," Majid Reza Hariri, the chairman of Iran-China Chamber of Commerce, was quoted as saying recently.
“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down demand for and the prices of these exporting items,” he said.
“For our production lines to be operational, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported. Given the restrictions placed on oil sales, this figure seems to be unreachable.”
Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture board of directors, said Iran has to prepare for a 30% decline in export value in the current Iranian year (March 2010-21) compared with last year due to the impacts of the spread of novel coronavirus on national and international trade.
“Under the current circumstances, it is estimated that the country’s exports will fall between $10-12 billion compared with last year. The main products that will experience a plunge due to the pandemic are petrochemicals, steel, mineral products, tiles, ceramics and nuts,” he was quoted as saying by ISNA.
Soltani, a former deputy head of ICCIMA, added that China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, exports to this country will hopefully remain unaffected.
“Yet, the outbreak of COVID 19, as well as the nosedive in oil prices, will make Iraq, our second biggest export destination, very cautious and we will face limitations on the commodities we can export to the neighboring country,” he said.
Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13-32% plunge in 2020 (best- and worst-case scenarios), noting that it is likely that the economic crisis awaiting the world now will be more intense than the one experienced in 2008.
