Why “slips” exports of goods from Iran to Russia

Speaking at the meeting of the joint Iran-Russia chamber of Commerce, Chairman Asadullah Asgari-Awladi concentrated on export Iranian products to Russia. He criticized the situation in which the trade-economic cooperation between the two countries even in comparison with neighboring Iran States clearly “stalled”, although the political dialogue between Moscow and Tehran is positive and dynamic. The Chairman of Iran-Russia joint chamber of Commerce, pointing to the positive state of political relations between Iran and Russia, said: “Russia compared to other markets of Eastern Europe is the largest consumer of food it imports from many countries. However, among countries that export to Russia, Iran is not on the first cast”.

Asgari-Awladi, pointing to Iran’s relations with 15 neighboring countries, said: “compared to these 15 countries, the volume of our Russian trade exchange is the lowest”. Speaking about the impact of sanctions on trade and economic relations of Russia and Iran, he stressed: “Sanctions are only a pretext. In addition to sanctions imposed by some us banks no other limitations do not affect us. But the Russians themselves chose to buy less from us.”

Speaking about the obstacles that hinder expansion of trade-economic cooperation with Russia, the Chairman of Iran-Russia chamber of Commerce said: “On the path of development of trade-economic cooperation between the two countries is strewn with obstacles. They relate to the interbank sector, Finance, transportation. There are also problems with obtaining visas, especially visas for entrepreneurs. We have repeatedly raised this issue before the Russian Ministers and other officials, but it has not been eliminated.” Recalling his visit to Russia, the Chairman of the Joint chamber of Commerce talked about how visited and inspected the food warehouse of one of the Russian network of food supermarkets.

He said: “the Owner of the point of sale showed me Iranian fruit stored next to products from other countries, and told me that the quality of products from Iran, as well as the appearance of packaging very low”.

“Another problem is that Iranian suppliers may not enter into long-term and continuous contracts on the supply of food, although the Russian side wants to sign agreements for all 12 months of the year,” added Asgari-Avlade.

One of the members of the Board of the Joint Iranian-Russian chamber of Commerce again pointed to the sanctions as one of the most important reasons for the low trade turnover between Russia and Iran. As said Andrei Lugansky, the Russian and Iranian economy is structurally very close to each other, but the Russian more. Pointing to the efforts that have been taken from the commercial Department of the Russian Embassy in Iran to strengthen Russian-Iranian cooperation, Lugansk, said: “the System of food trade in Russia and in Iran is very different. Russia has simply not found any independent food outlets exist only network”. The Chairman of the Joint Iranian-Russian chamber of Commerce, speaking about the problem of food security, also said: “We even at all desire cannot conclude with any company in Iran specializing in food agreement as they all just scattered and there is no large company that could come in on equal negotiations.” Luhansk also added: “in 2015 with one of the holding companies of Russia purchased and imported from Turkey 15 thousand tons of tomatoes. And we really need in Iran such companies that could supply us food items in such volume.”

A small share of Iran market size of $ 27 billion

In continuation of this topic, the Chairman of the Committee on agriculture of the chamber of Commerce in Tehran, characterizing the volume of Iranian exports to Russia, said: “the Total volume of exported Russian goods in 2016 amounted to 285 billion dollars, and 5 years ago it was 525 billion, that is, we see its decline by 46 %. And the ultimate goals of Russian exports are still countries such as Germany and the Netherlands”.

Speaking of volumes of Russian import of Kave Zargaran said: “the Russian import in 2016 was a total of 182 billion dollars. We see that it decreased by 42% compared with the same period in 2015, when it stood at $ 316 billion. But still the largest countries-suppliers to Russia are China, Germany and the USA”.

About the import of agricultural products and foodstuffs to Russia Zargaran said, “Total imports of food in Russia in 2016 amounted to about $ 27 billion. That is, the volume of the Russian market, oriented on imported goods, is quite large”. Zargaran also heads the Association of food industry of Iran, has listed the types of agricultural products, which are mainly exported to Russia. It is mostly fruit, citrus and nuts. He noticed that in this area there is a huge potential for exports to Russia. However, speaking about exporting to Russia from Iran, he drew attention to the following: “the Volume of our exports to Russia 5 years ago, in 1391 (according to traditional Iranian solar calendar — approx. transl.) amounted to 499 million dollars in 92-m to year it was £ 317 million, in 93-m — 246 million in ‘ 94 — only 173 million and only in the past, 95-year showed a slight increase in the figure of 219 million. That is, after four years of continuous decline, we saw a small growth.”

Fresh fruits, dried fruits, nuts, spices and vegetables are the principal articles of Iranian exports to Russia. “As for the Russian food and agricultural exports to Iran, it was mainly wheat, however, due to released in 95-m to year (solar calendar of Iran — approx. transl.) circular of the Ministry of agriculture of Iran and the restrictions imposed on the export of wheat, the article of the Russian export decreased markedly. Now turn — sunflower seeds and oil, corn and barley,” says Zargaran. He adds: “Overall potential of the Russian food market is 27 billion dollars, and the Iranian share of this — only 152 million. This is mainly pistachios and raisins, but it’s time to expand this range.”