Despite government claims, Iran’s non-oil exports stagnate
The Iranian government says it has increased its non-oil exports, but official figures show that the increase in revenue is the result of higher world prices, not increased shipments.
According to the latest figures released by the Iranian Customs Organization, the value of non-oil exports has increased over the past four months, but the actual volume has remained the same.
The latest figures published by the Customs Organization show that Iran exported 35.6 million tons of goods worth $17.2 billion in the first four months of the Iranian year (March 21-July 21). This is 22% more in value than the same period last year.
The average price of exported goods, according to the same report, stood at $505 per metric ton, up 24.6% from the same month a year earlier. However, the weight of goods exported during the same period decreased by 10%.
During the Iranian calendar month of Farvardin (March 21 to April 20), Iran’s exports to its top five destinations: China (35%), Iraq (11.5%), United Arab Emirates (18%), Turkey (9.75%) and Afghanistan (9.2%) – accounted for 77.1% of the country’s total non-oil exports.
The increase in foreign trade is due to the higher monetary value of goods in international markets after the outbreak of war in Ukraine rather than the volume of exported goods, said the president of the Iran-China Chamber of Commerce , Majidreza Hariri, told the reformist newspaper Arman-e Melli.
“An increase in exports would only be significant when the weight of exported goods would be higher and the goods would be exported to a wider range of destinations,” Hariri said.
However, the hardline government and its supporters are struggling to show economic success, as annual inflation has hit 54% in recent months, making life extremely difficult for the lower and missile classes. Food price inflation is actually close to 100%.
Referring to the impact of US sanctions on oil exports, Meysam Mehrpour, economic expert, told the Mehr news agency last week that planning for the country’s economy cannot be based on oil revenues due to US sanctions and fluctuating oil prices, so the best way to address the trade imbalance would be to increase non-oil exports.
Mehrpour also said that Iran generally exports its surplus food and agricultural products, but there are generally no long-term export plans in place regarding production, which prevents the Iran to become a powerful exporter with stable and sustainable export capabilities.
Iran’s oil exports fell to less than 300,000 bpd in 2019, a year after the United States pulled out of the 2015 nuclear deal and imposed sanctions. In January, President Ebrahim Raisi said his government had increased oil exports by 40% and oil export volume now stands at around 700-800,000 barrels per day.
Officials claims revenue from oil exports increased by 580% in the first four months of the current Iranian year compared to the same period a year ago. It is difficult to explain this bizarre claim even though exports have increased by 40% and oil prices by 30% since January.
Experts say higher revenues from oil and other exports last year were more than offset by a almost 50% increase in capital flight which is estimated at $9.3 billion in the 12 months ending March.
US sanctions since 2018 have had a huge impact on the Iranian economy. Last week, Hariri told the Iranian Student News Agency (ISNA) in an interview that Iran it would take 8 years to regain the economic status of 2010 even if it maintains an annual growth rate of 8% over the next few years.