Iran to benefit from expansion of ties with Russia in short term

Business Materials 2 December 2014 17:05 (UTC +04:00)
Tehran should take the opportunity to boost bilateral trades with Moscow in the short term.
Iran to benefit from expansion of ties with Russia in short term

Tehran, Iran, Dec. 1

By Milad Fashtami - Trend:

Tehran should take the opportunity to boost bilateral trades with Moscow in the short term.

Head of Iran World Trade Center Mohammad Reza Sabzalipour told Trend on December 1 that Iran can benefit from the western sanctions imposed on Russia.

"Moscow has voluntarily banned importing certain items from the western countries," He said, adding that the country needs to find new providers.

Earlier, Russian and Iranian representatives discussed the possibility of exporting fruits and vegetables from Iran to this country. Russia presented to Iran a list of 60 types of fruits, vegetables and food products needed for Russia, according to Iran's ISNA news agency.

Agricultural products account for 41 of 100 most profitable products exported to Russia, (March 20-Oct.20) according to the official statistics of Iranian Chamber of Commerce.

Iran exported $151 million worth of products to Russia from March 21 to Oct.23 and $80 million of this amount fell to the share of agricultural products. In other words, agricultural products account for more than half the value of exports from Iran to Russia.

Russia banned the import of agricultural products from Europe in August in response to the sanctions imposed on it over the Ukrainian crisis. Russia imported 11.8 billion Euro worth of agricultural and food products from Europe in 2013, according to the official data of the European Union.

"The Russians have requested to import a number of agricultural products from Iran, which will help Tehran boost its non-oil exports," Sabzalipour added.

However, he underlined that Iran should know that this would benefit Tehran only in the short term, since the Russians are not reliable trade partners, noting that "Moscow only thinks about its own interests".

"The same goes for China. Iran can benefit from short-term relations with Beijing, but the Chinese are not reliable partners, as well", Head of Iran World Trade Center said.

According to Custom Administration's reports, Iran has increased bilateral trade with Iran's import from China from $2.2 billion in 2005 to about $8.6 billion in 2013, while Iran's non-oil exports to China increased from $530 million to $6.8 billion during the mentioned time. Iran-China trade turnover (including crude oil) reached $45 billion during last year.

"We can see that Iran canceled several major projects especially in the oil and gas sector, with Chinese firms, due to long delays and failure to complete the projects," the expert said. During last year, Iran canceled several upstream projects with China, including South Azadegan oilfield, South Pars Phase 11, etc.

"By taking appropriate measures Iran can boost its non-oil exports considerable even in a six-month period," he said.

"Iran's budget is hugely dependent on oil revenues, but it would be safer to reduce the dependence by increasing non-oil exports gradually," Sabzalipour explained.

"Countries such as Germany, Japan, and Austria are not oil exporters, but they have strong economies. Iran should follow in their footsteps, as well," he said.