Iran explains why it isn't boosting export volume to regional markets

Business Materials 24 April 2019 16:27 (UTC +04:00)

Baku, Azerbaijan, April 24

By Elnur Baghishov – Trend:

Iran does not increase the export volume to the regional markets and one of the reasons is connected with the country's export basket, Mohammed Lahuti, chairman of the Iran Export Confederation, said.

Most of the products exported by Iran are either raw or semi-finished products, Lahuti added, Trend reports referring to Mizan news agency.

Lahuti added that Iran has good opportunities in agricultural sector.

Iran achieved great success in export of agricultural products to Iraq and Afghanistan, he added.

One of Iran’s structural problems in the foreign trade is the transport sector, he said.

Prices in Iran are much higher than the regional and world prices, he said.

Lahuti added that there is no infrastructure in the transport sector. Presently, the problems occur due to Iran's old vehicles.

He said that the shipping cost increased from 42,000 rials to the price determined upon NIMA system. That is, the price has doubled.

Cargo transportation via vehicles has also tripled compared to some countries, he said, adding that these cases have a negative impact on export.

"The Iranian Trade Promotion Organization should pay special attention to the issuance of subsidies in the transport sector to support export. The heavy trucks should be renovated," Lahuti said.

Presently, there are four prices of foreign currency in Iran. According to the official exchange rate announced by the Central Bank of Iran, $1 is 42,000 rials. Only necessary products should be imported to the country through this currency.

The exchange rate system announced by the Central Bank of Iran to the banks is the SANA system. The price of $1 is 138,000 rials in the system.

As per NIMA, a system intended for the sale of a certain percentage of the foreign currency gained from the sale non-essential goods and export, the price of $1 is 92,000 rials.

The price of $1 is around 135,000-140,000 rials in the black market in Iran.