Iran-Russia transactions in the first half of the year increase by 42% to reach $2.7 billion


Trade turnover between Russia and Iran in January-July amounted to $2.7 billion, the Russian Foreign Ministry said in a statement.
“We note the progress of negotiations for a full-fledged free trade agreement between Iran and the EAEU [Eurasian Economic Union]. Four rounds of consultations have already taken place; we hope that the desired result will be achieved as soon as possible. This will give new impetus to bilateral trade and economic interaction, the volume of which is constantly growing. Between January and July of this year, the trade turnover amounted to 2.7 billion dollars. This is 42.5% more than in the same period last year,” the Russian Foreign Ministry said in a statement reported by News.am.
Iran and the Eurasian Economic Union signed a three-year interim agreement in Astana, Kazakhstan on May 17, 2018, for the bloc to welcome Iran into the EEU. The arrangement, which lowered or removed tariffs, is the first step towards implementing free trade between Iran and the five-member union.
The two parties are in talks to turn the agreement into a free trade agreement.
As part of the free trade agreement Iran is negotiating the Eurasian Economic Union, 80% of goods traded between the two sides will be entitled to zero tariffs, according to Mirhadi Seyyedi, adviser to the Iranian Organization of trade promotion for international business and trade treaties. He is the chief negotiator of the talks with the UEE.
“Never before have we had an agreement as inclusive as this. [the prospective free trade deal with EEU]. Obviously, when the interim agreement is transformed into a free trade agreement, our foreign trade will get a huge boost,” Seyyedi was quoted as saying by IRNA.
The next round of negotiations on a full-fledged free trade agreement between the EAEU and Iran will take place in Moscow at the end of September. The decision was taken during the meeting of the trade representative of the Eurasian Economic Commission, Andrey Slepnev, with the Iranian Deputy Minister of Industry, Mines and Trade, Alireza Peymanpak, learned BelTA from the press service of the EEC.
The parties praised the level of trade and economic cooperation between the Eurasian Economic Union and Iran.
Peymanpak said that this year, mutual trade and transit of goods across Iran in the north-south direction has increased by almost 50%.
According to Slepnev, significant progress in the transition to settlements in national currencies is of particular importance in the current environment.
“The latest key positive development was the start of trading in the ruble-rial currency pairs,” the EEC minister said.
The parties presented a new timetable for the negotiations on the future agreement.
“We expect significant progress in the tariff part, which will bring the final stage of the negotiation process closer,” Slepnev concluded.
Iran and EAEU member states traded over 1.4 million tons of goods worth $697 million in the first quarter of the current Iranian year (March 21-June 21 ), according to data published by the Customs Administration of the Islamic Republic of Iran.
Iran’s exports to the bloc amounted to 681,000 tons worth $233 million during the period, registering a 4% increase in tonnage but an 11% drop in value compared to the similar period last year.
Russia was Iran’s largest export destination among EAEU states with 303,000 tons worth $115 million, registering a 14% and 23% increase in weight and value respectively year over year, IRIB News reported.
Iran’s imports from EAEU countries amounted to 748,000 tons worth $464 million during the three months under review, indicating an increase of 32% and 34% in weight and in value respectively compared to the corresponding period of last year.
Russia also topped the list of exporters with 586,000 tons worth $394 million, registering a 14% and 23% year-on-year increase in tonnage and value respectively.
“Russia supports Iran’s admission to the Shanghai Cooperation Organization. We expect Iran to sign a memorandum of engagement at the SCO summit in Samarkand in September 2022,” the Russian Foreign Ministry statement added.
According to data published by the Customs Administration of the Islamic Republic of Iran, in 2021, Russia exported $1.7 billion worth of goods to Iran, which represents 3.1% of total imports of Iran.
In return, Russia imported about $1.1 billion worth of goods from Iran, accounting for 1.2 percent of Iran’s total exports last year.
Russia’s exports to Iran in 2021 increased by 56% and Russia’s imports from Iran increased by 15% compared to 2020.
About 66% of the total value of Russian exports to Iran was cereals, mainly wheat.
The main product exported to Russia from Iran was pistachios, with a share of 9.1% of total exports.

The largest Russian trade mission to Iran

A 125-person Russian business delegation made up of representatives from 78 companies is due to visit Tehran from September 19 to 21 to meet their Iranian counterparts and explore ways to expand cooperation.
Members of the visiting delegation are active in many fields, including agriculture, food and related machinery, mineral water, beverages, cereals, chocolate and pastry, edible oils, fishing , packaging, health, pharmaceuticals, medical equipment, building materials, glass and crystal, wood industries, automotive spare parts, transport, industrial machinery, metallurgical industries, radio and telecommunication systems, excavation, energy, recycling, digital marketing and education, Tehran Chamber of Commerce, Industries, Mining and Agriculture news portal reported.
The upcoming visit is part of an agreement between the Tehran Chamber of Commerce and the Russian Export Center. It would be the largest delegation to visit Iran so far.

Trade in national currencies

Iran and Russia have started trading in their national currencies.
Iran’s Ambassador to Moscow, Kazem Jalali, said recently that entities from both countries have started trading rials and rubles for the first time. The currencies were managed by the Russian Central Bank’s Mir system, IRNA reported.
Russia created Mir in 2014 in response to sanctions related to the conflict with Ukraine.
Iran and Russia have been trying for some time to use their own currencies for their trade relations. Iranian Economy Minister Ehsan Khandouzi announced in July that the Islamic Republic had officially abandoned the US dollar for trade with Russia.
In the same month, the Tehran Stock Exchange launched rial-ruble trading.
Iran, like other countries, generally trades in US dollars. Trading with Russia in rials and rubles allows Iran to further circumvent the US-dominated global financial system. For example, in 2019 the international financial messaging system SWIFT cut off access to most Iranian banks under pressure from Washington.
Some Russian banks were also banned from using SWIFT in February in response to the Russian invasion of Ukraine.
The US dollar could lose some of its dominance in the Middle East. Saudi Arabia and China also discussed pricing oil transactions in yuan instead of dollars. India also decided last month to allow rupee payments for imports and exports, which could also boost trade with Iran, Al-Monitor reported.

Previous Double Trouble: Inflation and Supply Shortages
Next Egypt changes wheat procurement strategy to cope with high prices