New trade data show Iran’s exports to Iraq are rising after they plummeted in the first half of the current Iranian year (started March 21).
Iran’s exports to neighboring Iraq stood at $7.03 billion during the first seven months of the current Iranian year (March 21-Oct. 22), according to a board member of Iran-Iraq Chamber of Commerce.
“Exports during the seventh month of the year [Sept. 23 to Oct. 22] stood at $647 million, which was higher than the monthly average of $600 million registered in the first half of the year,” Hamid Hosseini was also quoted as saying by Fars News Agency.
He put Iran’s last year (March 2021-22) exports to the neighboring country at $9 billion, excluding electricity exports.
“The decline in Iran’s exports to Iraq during the first half of the year was to blame on several factors, including the change of government in the neighboring country, Arbaeen commemorations that caused a temporary suspension of trade and the abolition of subsidized imports in Iran,” he said.
“We have tried hard over the years to find a foothold in the Iraqi market. At present, two other countries that are extensively active in Iraq are China and Turkey, but the products sold by each of these countries do not overlap. Turkey mainly exports gold, plastic and apparel to Iraq. China sells electronic devices, home appliances and turbines. We are not prominent exporters in any of these goods, so there is no competition there.”
Iraq is one of the main destinations for Iran’s agricultural, food and mining products.
According to an official with the state-owned mining holding company, Iranian Mines and Mining Industries Development and Renovation Organization, Amir Sabbagh, Iraq accounted for one-fifth of Iran’s total steel exports during the first half of the current Iranian year (March 21-Sept. 22).
Behnam Aziz-Zadeh, the head of Tiles and Ceramics Manufacturers Association, says that in the last Iranian year (2021-22), Iraq was the main destination of Iran’s ceramics and tiles as the neighboring country accounted for 70% of total exports.
“Iraq meets 84% of its tiles and ceramics demand from Iran,” he was quoted as saying by IRIB News.
According to a customs expert, Rouhollah Latifi, Iraq alone accounted for 37% of Iran’s total exports of agricultural and food products in terms of tonnage during the fiscal 2021-22.
“Historical, cultural and religious commonalities between the two nations of Iran and Iraq and the development of political and economic relations between the two countries have led to Iran's non-oil exports increasing from $145 million in the fiscal 2001-02 to $9 billion in the fiscal 2019-20. Last year’s [2021-22] exports hit 30 million tons worth $8.92 billion. In recent years, Iraq has become the second-largest export destination of Iranian goods in the world and the top destination among Iran's neighbors,” Latifi, a former spokesman of the Islamic Republic of Iran Customs Administration, said.
He explained that Iran registered its first jump in exports to Iraq in the fiscal 2005-06 with $1.22 billion worth of shipments, which figure reached $4.56 billion in the fiscal 2009-10, $6.34 billion in the fiscal 2012-13 and $8.99 billion in the fiscal 2018-19.
“Iran’s imports from Iraq, which mostly included essential goods, reached a record high of 2.7 million tons of goods worth $1.2 billion in the last Iranian year [March 2021-22],” he added.
In other words, imports in the fiscal 2021-22 were higher than the volume registered in the last two decades.
Besides agrifood products, construction materials, petroleum products, electronics, medical equipment and medicine, automobiles and spare parts, clothing, bags, shoes, iron products and nuts were the main goods exported from Iran to Iraq.
Essential goods such as wheat, barley, oil, corn, soybean, rubber, paper, and cereals, along with machinery, scrap metal, home appliances, electronic equipment and measuring devices, were among the most important goods imported from Iraq.
Kermanshah in western Iran shares around 371 kilometers of borders with Iraq and the Kurdistan Region.
The province accounts for around half of Iran’s annual non-oil exports to Iraq.
Railroad Connection
Iran and Iraq have agreed to build a railroad connecting both countries with Iran’s Minister of Roads and Urban Development Rostam Qasemi signing an agreement with his Iraqi counterpart for the implementation of the Basra-Shalamcheh railroad.
The Islamic Republic of Iran Railways and Iraqi Republic Railways plan to establish a joint venture to complete the project, IRIB News reported.
The project would connect Basra in southern Iraq to Shalamcheh in western Iran. There are only around 30 kilometers (18 miles) between the two areas. The railroad would be strategically important for Iran, linking the country to the Mediterranean Sea via Iraq and Syria’s railroads.
According to Al-Monitor, this is not the first time Iraqi and Iranian officials have promised to build the railroad. The Islamic Republic of Iran Railways revealed details of a plan to connect Basra with Shalamcheh in 2018.
The 32-kilometer-long railroad will be funded by Iran's Mostazafan Foundation.
The Iraqi side has failed to build the railroad from Shalamcheh to Basra due to a shortage of funds.
The launch of the railroad will boost Iran's exports to Iraq and from this route to West Asian and North African countries.
In order to complete the Shalamcheh-Basra railroad, the 17-kilometer Khorramshahr-Shalamcheh railroad was completed in 2011 to connect Iranian railroads to the Iraqi city of Basra.
The project is aimed at facilitating the travel of Iranian pilgrims, especially during the Arbaeen pilgrimage and travelers could use this rail link from Iran via Basra to Karbala and other holy cities of Iraq.
While Iraqi passenger and freight trains are using the rail link of Basra to Karbala, Iranian pilgrims have been travelling by train from Tehran to Shalamcheh and from there after a 32-km trip by bus to Basra and depart from Basra for Karbala by Iraqi railroad.
According to Al-Monitor, the railroad is part of Syria’s reconstruction deal, promoting religious tourism among Iran, Iraq and Syria. Syrian opposition parties, however, have rejected the railroad, believing it will entrench Iranian influence and help provide the logistic services necessary for its presence in Iraq and Syria.
Former Iranian president, Hassan Rouhani, said the Shalamcheh-Basra railroad would connect Iran to Iraq, Syria and the Mediterranean, causing a fundamental change in the region.
"Iran's Khorramshahr, Abadan and Shalamcheh are located in a very important strategic area," he was quoted as saying by Mehr News Agency.
"Due to the agreement made with the Iraqi government on connecting Shalamcheh to Basra, we will be able to witness a fundamental change in this region. This will be a very big change, and Iran's railroad will be connected to Iraq and Syria, and in fact to the Mediterranean, which is very important," he added.
