Iran traded 33.2 million tons of goods (excluding crude oil exports) worth $20.22 billion with the Persian Gulf’s six littoral states, namely Iraq, Kuwait, Qatar, the UAE, Bahrain and Saudi Arabia, during the first eight months of the current fiscal year (March 21-Nov. 21), registering a 19.33% fall in terms of weight, but a 0.86% rise in terms of value respectively, latest data released by the Islamic Republic of Iran Customs Administration show.
The UAE was Iran’s top trade partner among the countries under review with 15.69 million tons (up 2.51%) worth $15.16 billion (up 16.67%). It was followed by Iraq with 13.31 million tons (down 42.5%) worth $4.78 billion (down 30.04%) and Kuwait with 3.48 million tons (up 82.64%) worth $134.69 million (up 47.45%).
Iran’s non-oil exports to the six countries hit 25.01 million tons worth $8.87 billion during the period, to register a 20.92% and a 4.2% decrease in terms of weight and value YOY, respectively.
The main export destination was Iraq with 13.22 million tons (down 38.88%) worth $4.66 billion (down 23.89%), followed by the UAE with 7.6 million tons (up 4.34%) worth $3.98 billion (up 35.37%) and Kuwait with 3.48 million tons (up 192.66%) worth $128.07 million (up 40.19%).
Imports stood at 8.19 million tons worth $11.35 billion during the eight months, registering a 14.02% decline in terms of weight, but a 5.21% growth in terms of value YOY.
The UAE topped the list of exporters to Iran among Persian Gulf states with 8.08 million tons (up 0.86%) worth $11.18 billion (up 10.97%). It was followed by Iraq with 90,681 tons (down 93.99%) worth $119.76 million (down 83.05%) and Qatar with 10,425 tons (up 511.1%) worth $39.7 million (up 501.63%).
Iran’s total foreign trade, excluding crude oil exports, stood at 93.8 million tons worth $69.48 billion during the period to register a 10% rise in terms of value compared with the corresponding period of last year, according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“Exports hit 70.4 million worth $32.36 billion during the period, registering a 16% decline in terms of weight, but a 4.44% rise in value,” Morteza Emadi was also quoted as saying by IRIB News.
Liquefied propane, methanol, liquefied butane, polyethylene, petroleum bitumen, urea, liquefied natural gas, iron and steel ingots, and light oils were the main goods exported during the period.
China, Iraq, the UAE, Turkey and India were the main export destinations in a descending order.
Imports stood at 23.4 million worth $37.11 billion during the period, registering a 12.44% fall in terms of weight, but a 15.25% rise in value.
Corn, rice, wheat, soybeans, sunflower oil, cellphones, flour and unrefined sugar were the main imported products.
The UAE, China, Turkey, India and Germany were the top five exporters to Iran during the period.
Iran traded 60.87 million tons of goods worth $31.9 billion with the Persian Gulf littoral states in the fiscal 2021-22, up from $22.36 billion in the year before. Exports totaled 45.43 million tons worth $14.15 billion while imports stood at 15.43 million tons worth $17.76 billion.
UAE a Key Partner
Despite the role and significance of the UAE in Iran’s foreign trade, the two neighbors have yet to sign an agreement on preferential trade tariffs, Farshid Farzanegan, a former chairman of Iran-UAE Chamber of Commerce, has said.
“Due to geographical, cultural, trade and historical relations between Iran and the UAE, as well as the volume of annual imports [from the Emirates], that country offers an opportunity to Iranian companies,” he was quoted as saying by Fars News Agency.
“The Arab neighbor plays an important role in international trade and global value chains.”
Farzanegan, who is a member of the joint chamber’s Board of Directors, said the UAE’s average annual trade with Iran from the fiscal 2010-11 to fiscal 2018-19 stood at $13 billion. It was $13 billion for China, $5.5 billion for South Korea, $5.5 billion for Turkey and $5 billion for Iraq.
Iran’s exports to the UAE include vegetable, lead, melon, grapes, spice and cement, with each Iranian item having a nearly 10% share of the Emirati market.
Noting that a major constraint in two-way trade is banking and money transfer, Farzanegan said insurance coverage for bilateral trade is insufficient.
“It is not possible for traders to open letters of credit. The lack of consortiums for export of technical and engineering services is another problem. This is while trade infrastructure in the UAE is robust. Therefore, to develop trade with this country, we must upgrade and develop our infrastructure. Iran’s geopolitical and geoeconomic advantages allow for transport of goods from Turkey and the CIS states to the UAE,” he said.
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah to the Turkish port of Mersin docking at Iran’s Shahid Rajaee Port in November 2021 before reaching Turkey through the Bazargan border in northwest Iran.
Mohammad Hossein Rezaian, an expert on transit trade, told Mehr News Agency that the cargo entered Shahid Rajaee Port in southern Iran along the Persian Gulf coast and reached the Turkish port of Mersin.
The new route shortens transportation time by 12 days, meaning that it takes eight days for the shipment to reach Turkey via Iran from Sharjah. In the past, ships had to cross the Bab al-Mandeb Strait, the Red Sea and Suez Canal to reach Turkey after 20 days.
Noting that the UAE has zero tariff on imports of almost all goods, except Iranian cement with a 5% tariff, Farzanegan said it is crucial for Iran to forge a preferential tariff agreement with the UAE to be able to boost trade.
Iran’s import tariffs are among the highest in the world, with some items carrying a tariff as high as 40%.
“We have no preferential tariff agreement with any country. A deal has been concluded with Turkey and negotiations have been held with Pakistan,” he added.
During a recent visit by the Minister of Industries, Mining and Trade Reza Fatemi-Amin to the UAE, the two sides discussed the prospects of enforcing preferential trade and tariffs. However, an agreement is pending.
Iran’s first trade center licensed by the Trade Promotion Organization of Iran was inaugurated in Dubai, the UAE, in December 2021.
Iran Chamber of Commerce, Industries, Mines and Agriculture reported that the center should help Iranian companies find a foothold in the UAE, Dubai in particular, which is one of the hubs of Iran’s trade in the strategic region.
It also seeks to use advanced information technology to create a platform that facilitates Iranian businesses in the Emirati market with technical advice and consultation.
