A total of 23,970 tons of shoes worth $55 million were exported from Iran during the first eight months of the current Iranian year (March 21-Nov. 21), registering a 0.1% rise in weight and an 11% decline in value compared with the similar period of last year, according to a board member of Iran’s Society of Shoe Industry Managers and Experts.
“Our exports are mainly shipped to Iraq, Afghanistan, Azerbaijan, Turkmenistan, and Pakistan,” Ali Lashkari was also quoted as saying by the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
The official noted that as a result of the foreign currency policies imposed by the Central Bank of Iran since the fiscal 2018-19, the country has been losing its foothold in its export destinations.
CBI mandates all exporters to sell their export earnings at rates lower than market prices. Iran has a multiple foreign exchange system.
“This has been more of an issue in the Iraqi market. Based on the latest data, Iraq’s shoe market grew by 45% from $364 million in 2014 to $501 million in 2021. This is while over the same period, Iran’s exports have declined from $67 million to $60 million, meaning our share in Iraq’s shoe market has fallen from 15% in 2014 to only 10% last year,” he added.
Lashkari noted that during the same period, Iran’s rival China, though thousands of kilometers away, increased its shoe exports to Iraq from $141 million to $364 million, and now meets 73% of the Iraqi market demand.
“We are grappling with countless problems in shoe production and trade. One problem is that shoe production inflation is higher than the total inflation rate. Moreover, end prices are high, which makes it difficult for Iranian shoes to compete in international markets,” he said, adding that Turkey is another major rival of Iran in the regional markets.
The customs terminals in the city of Qom, Tehran and Mashhad have registered the highest share of shoe exports from Iran.
A Mostly Self-Reliant Industry
Mohammad Reza Davarpanah, a member of the Producers and Exporters of Synthetic Leather Association, says 85% of raw materials for production of footwear are procured domestically and 95% of the required machinery are manufactured inside the country.
In the fiscal 2018-19, imports of 1,400 types of commodities were banned in an attempt to support local producers of these goods. Footwear and bags were among this long list.
“When this regulation came into effect, foreign exchange rates experienced an upsurge, making prices of foreign shoes unaffordable for Iranians. Therefore, smuggling of these goods also decreased, making way for domestic producers to show their capabilities and at the same time work on increasing the quality of their products and updating their knowledge of contemporary global fashions,” Alireza Ajdarkosh, the head of Shoes and Related Industries Guild Union, also told Fars News Agency.
The official noted that Iranian businesses active in footwear production need to do serious work in branding to be able to do better in domestic and international markets.
Cheap Imports Deal Blow to Domestic Industry
Alireza Jabbarian, the head of Tabriz Cordwainers Union, has referred to the presence of cheap shoes made in China in the Iranian market and said after the ban on shoe imports was implemented, Iran’s shoe industry registered significant growth.
“At present, domestic companies are producing footwear with qualities on par with international standards, which can also appeal to Iranian consumers’ taste,” he added.
Lashkari has confirmed that the import of cheap and low-quality footwear has seriously harmed the domestic shoe industry.
According to the official, from 2013-14 to 2019-20, a total of $2.12 billion worth of shoes were imported to Iran, mostly from China, the UAE, Turkey, Italy, India and Thailand.
“Considering the role of the UAE in [re-]export of Chinese products to Iran, it is estimated that about 88% of imported shoes come from China and the rest from Turkey, Italy, Thailand and India,” he was quoted as saying by ICCIMA’s news portal.
