Iran registered a trade surplus of $1.26 billion in the month ending Aug. 22, according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“Exports over the fifth Iranian month [July 21-Aug. 22] hit 7.14 million tons worth $3.32 billion. The figures show a 9.5% decrease in weight but a 54% rise in value compared with the similar period of last year,” Rouhollah Latifi was quoted as saying by Mehr News Agency.
China with 2.43 million tons worth $1.5 billion was Iran’s top export destination, accounting for 34% and 45% of the country’s overall export volume and value respectively during the month under review.
“Iran’s next biggest export destination was Iraq with 1.08 million tons worth $346 million, followed by the UAE with 734,000 tons worth $285 million, Turkey with 362,000 tons worth $184 million and Afghanistan with 364,000 tons worth $127 million,” he added.
A total of 1.31 million tons of commodities worth more than $2.05 billion were imported to Iran during the month, registering a 36% and 26% decline in weight and value respectively compared with the corresponding period of last year.
The main exporters to Iran were the UAE with 368,000 tons worth $711 million, China with 127,000 tons worth $476 million, Turkey with 262,000 tons worth $281 million, Germany with 80,000 tons worth $105 million and Switzerland with 20,000 tons worth $33 million.
Latifi did not mention the country’s main export goods but said the lion’s share of imports over the period were mobile phones ($239 million), soybeans ($147 million), field corn ($112 million), wheat ($72 million) and barley ($40 million).
Iran’s total foreign trade during the month stood at 8.45 million tons worth $5.38 million.
Latifi noted that a total of 974,000 tons of different kinds of products were transited through Iran during the same period, indicating a 94% hike YOY.
Five-Month Perspective
Iran registered a $1 billion in non-oil trade surplus in the first five months of the current fiscal year (March 21-Aug. 22), according to Mehdi Mirashrafi, director general of the Islamic Republic of Iran Customs Administration.
Iran’s total foreign trade hit 59.3 million tons worth $34 billion during the period, registering a 14% and 38% growth in weight and value respectively, year-on-year, the news portal of IRICA reported.
Non-oil exports stood at 45.5 million tons worth $17.66 billion, registering a 20% and 63% growth in weight and value respectively compared with the corresponding period of last year.
The exports mainly included methanol, natural gas, polyethylene, semi-finished iron products, iron ingots, gasoline, liquid propane, iron pipes, urea and bitumen.
The top five destinations of Iranian exports were China with 12.3 million tons worth $5.9 billion, Iraq with 12 million tons worth $3.16 billion, the UAE with 5 million tons worth $1.9 billion, Turkey with 1.37 million tons worth $1.1 billion and Afghanistan with 2.16 million tons worth $885 million.
Imports stood at 13.8 million tons worth $16.63 billion from March 21 to Aug. 22, registering a 5% decline in terms of weight but a 21% growth in terms of value YOY.
The top 10 imported goods were cellphones, corn, soybeans, sunflower oil, barley, wheat, soymeal, palm oil, sugar and carbon electrodes.
Notably, cellphones recently topped the list of imports to Iran.
Latest IRICA data show 5.16 million devices worth $1.16 billion were imported during the first four months of the current Iranian year (March 21-July 22), registering a 28% and 102% growth in volume and value respectively.
The imported cellphones mainly came from the UAE, China and Vietnam.
Samsung, Xiaomi, Huawei and Nokia were the main brands of imported cellphones.
The average price of each device stood at $224 in the period under review, which was $82 higher than the $142 in the corresponding period of last year.
Iran’s imports stood at $14.58 billion in the four-month period, of which 8% belonged to cellphones.
“One of the most important reasons for the rise in imports can be the increase in the need for smartphones at home by students according to the conditions of virtual education, due to the Covid-19 pandemic and closure of schools and foreign-language academies,” IRICA official, Arezoo Ghanniyun, was quoted as saying by Mehr News Agency.
She also pointed out that the limited operating time of cellphones (an average of three years for each device) is another reason for the rise in imports and the need to buy new products.
The number of cellphones imported by passengers stood at 92,721 devices during the same period, therefore the total number of imported cellphones hit 5.25 million devices in the first four months of the current fiscal year.
The imports mainly came from the UAE (4.43 million tons worth $5.39 billion), China (1.1 million tons worth $3.6 billion), Turkey (1.57 million tons worth $1.8 billion), Germany (341,000 tons worth $668 million) and Switzerland (692,000 tons worth $572 million).
According to Mirashrafi, a total of 4.72 million tons of different kinds of commodities were transited via Iran during the same period, showing a 95% upsurge compared with the similar period of last year.
Decline in Fiscal 2020-21 Trade
Iran’s non-oil foreign trade declined from $85 billion in the fiscal 2019-20 ($41.3 billion worth of exports and $43.7 billion of imports) to $73 billion in the fiscal 2020-21 ($34.52 billion of exports and $38.5 billion of imports).
Latest statistics released by the Central Bank of Iran show that except in the month to Oct. 21 and the one to Nov. 20, Iran’s trade balance was negative every month last year.
The two months saw a respective trade surplus of $1.42 billion and $0.12 billion.
The highest export value was registered in the month to Oct. 21 with $4.67 billion weighing 19.26 million tons while the month to March 20 registered the highest import value with $4.57 billion weighing 2.92 million tons.
The lowest export and import values were registered in the month to April 19 with $1.65 billion weighing 5.35 million tons and $1.93 billion weighing 2.53 million tons respectively.
According to the Trade Promotion Organization of Iran, there were four main reasons behind the decrease in Iran’s foreign trade in the fiscal 2020-21 compared with the years from the fiscal 2011-12 to 2013-14.
The first reason behind the decrease was the decline in oil revenues. Parts of raw material costs are supplied from oil revenues. The decline in revenues reduced foreign exchange earnings and hindered the import of raw materials for export products. Therefore, it caused a decline in the volume of exports during the period.
Currency shock is another reason behind the decline. One of the main variables affected by currency shocks is non-oil exports. Iran’s currency market faced US sanctions, a decline in foreign exchange reserves and the Covid-19 pandemic. Alongside these problems, the Central Bank of Iran’s forex earnings law made some exporters unable to meet CBI requirements, so they stopped exporting their products and waited for the currency market and forex laws to stabilize.
The US imposed sanctions on petrochemical industries and 39 related institutions, and its Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries.
Due to the low oil prices in the fiscal 2020-21, alongside the US sanctions, petrochemical products registered a decline in the period under review.
The Covid-19 pandemic was another reason behind the significant decline in trade. Closure of borders, new standards for foreign trade and the wariness of other countries in exporting Iranian products, especially for agricultural and food products, caused a decline in Iran’s foreign trade.
Iran and the US are holding indirect negotiations on a return to compliance to the 2015 Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action. Representatives of Britain, China, France, Germany, Russia and European Union shuttle between US and Iranian delegations.
JCPOA limited the scope of Iran's nuclear. In return, the Islamic Republic received relief from US and international sanctions. Washington walked out of the deal under the administration of former president, Donald Trump.
With a likely agreement between the two countries and lifting of sanctions, some of these obstacles such as US sanctions may be removed and there is an opportunity for Iran to develop and increase foreign trade.
