According to reporter Mehr, based on the latest report of the Islamic Republic of Iran Customs Administration, in the first quarter of 1404, the total non-oil trade exchanges of Iran reached 43 million 489 thousand tons of goods worth 24 billion 684 million dollars. This figure, compared to the same period last year, indicates an unprecedented decrease in both export and import weight and value indices; a trend that can affect the dynamism of the country’s foreign interactions.
Decline in exports
In the spring season, Iran’s non-oil exports reached 34 million 476 thousand tons of goods worth 11 billion 655 million dollars, which compared to last spring, decreased by 9.3 percent in weight and 14.4 percent in value. This decline, especially in the value index, is alarming; because it reflects a decrease in the foreign exchange earnings of exports, a drop in the prices of goods in target markets, or a decrease in the competitiveness of domestic products.
The average customs value of each ton of exported goods is estimated at 338 dollars, which has decreased by 5.6 percent compared to last year; another indication of the qualitative decline of the country’s export basket. In other words, the share of high value-added goods in Iran’s exports has decreased and exports remain dependent on raw or semi-raw goods.
Meanwhile, the export of petrochemical products, as one of the main pillars of non-oil exports, has also been accompanied by a decrease. This spring, 11 million 133 thousand tons of petrochemical products worth 4 billion 684 million dollars were exported, which shows a decrease of 28.7 percent in weight and 24.5 percent in value compared to last year. This significant decrease can be a warning bell for the future of the country’s foreign exchange balance and increased dependence on limited regional markets.
Reduction of imports; necessity or limitation?
On the other hand, imports in foreign trade have also decreased. In the first quarter of this year, 9 million 13 thousand tons of goods worth 13 billion 29 million dollars entered the country; which experienced a 4.35 percent decrease in weight and an 11.73 percent decrease in value compared to the same period last year.
More importantly, the 7.7 percent decrease in the average value of each ton of imported goods (1446 dollars) indicates that the structure of imports has also changed towards lower value goods or the purchase of high-quality capital and intermediate goods has decreased. This issue can negatively impact the quality of domestic production and the competitive ability of industries in the medium term.
The major imported items also indicate a focus on imports for consumer and food needs. Raw gold (965 million dollars), livestock corn (883 million dollars), rice (500 million dollars), sunflower seed oil (493 million dollars), and mobile phones (372 million dollars) top the import list; goods that mostly meet the consumer needs of society and have less productive or developmental roles.
Trade partners; Asians still leading
In terms of trade geography, the UAE with 3.886 billion dollars, China with 3.428 billion dollars, and Turkey with 1.986 billion dollars have been the main import partners of Iran in the first quarter of 1404. India, Germany, Russia, and the Netherlands are also in the next ranks. This combination reflects Iran’s reliance on imports from Asian countries and the reduction of Europe’s role in trade interactions.
Quantitative and qualitative decline in trade in spring 1404
The summary of the customs data shows that Iran’s foreign trade in the current spring season has faced a decline in terms of volume (weight) and quality (value per ton of goods). The decrease in exports and imports alongside the decrease in the value of traded goods can be a sign of the weakening of the main economic drivers, a reduction in competitive production capacity, and disruption in the internal supply chain.
According to experts, although part of this situation may be due to foreign exchange constraints, continued sanctions, decreased global demand, and also instability in the domestic exchange rate, the role of inefficient trade policies, lack of effective export incentives, and lack of coordination among executive bodies in regulating foreign trade cannot be overlooked. In such circumstances, a serious review of the country’s trade strategies is an economic necessity.
To break out of this exhausting cycle, it is necessary to facilitate export processes by reducing bureaucratic barriers, improving customs infrastructure, and expanding trade agreements with target countries, and also to direct imports towards capital, technology-oriented, and complementary domestic production goods; because the continuation of importing consumer or non-productive goods not only depletes the country’s foreign exchange resources but also eliminates the opportunity to improve efficiency and competitive ability of domestic industries.
The continuation of the current trend not only leads to a decline in the trade balance but also in the long run, will confront the dynamism of foreign trade, production security, and economic growth of the country with serious challenges. Repairing this path requires the will of the custodians, data-based decision-making, and systematic coordination among the country’s economic institutions.
News code: 6518741
Source: Mehr News Agency
