Iran’s petchem exports down 18% in first seven months

Iranian petrochemical exports plunged 18% in the first seven months of the current Persian calendar year (March 21-October 22), a bne survey has found, with exporters blaming the noticeable drop on the monetary policies of the Central Bank of Iran (CBI).   

Top members of the Iranian oil, gas and petrochemical products exporters' union (OPEX) blasted the CBI for an “unwise” decision that forces exporters to present their forex revenues to a government foreign exchange centre in which rates are significantly low, semi-official news agency ILNA reported on December 10.

In the forex system, known as Nima, the US dollar was selling for as much as IRR386,000 on December 10, while the price for a US banknote was more than 30% higher on the unofficial market at around IRR503,500.

Nima was set up to ease Iranian importers’ access to foreign currencies at a lower rate. However, critics believe no imported goods are delivered to Iranian end users with subsidised foreign currencies.         

According to OPEX members, such a huge gap between the imposed rate and that of the unofficial market has “acted against exports” and only served the interest of importers, not the general public.    

“The CBI decision is detrimental to the sector and is causing a loss of profit. This will lead to the closure of manufacturing units,” warned Ahmad Maroufkhani, the chairman of the OPEX board of directors.

“The decision was the biggest treachery against production and export,” he added.

OPEX board member and spokesman Hamid Hosseini painted a gloomy picture for petrochemical exports.

“Iran's total exports of petrochemical products… this year is unlikely to beat $12bn and will suffer a substantial decrease compared to last year,” Hosseini predicted.

As per the data provided by Hosseini, the seven-month exports almost closed in on $8bn, plummeting 18% from $9.75bn in the same period a year earlier.

Urea was the hardest hit with a 44% dive, followed by oil products, including motor and gear oils, which experienced a fall of 41%.

Polymer makers shipped over $1.7bn worth of the commodity in the first seven months of the Iranian calendar year, posting a slide of 36%.

Hosseini attributed the drop to limits set by the government as well as tariffs levied on polymer exports.

Among the products rising in terms of export value, bitumen set the highest rate of growth with a 26.6% surge in the seven-month timeframe versus the same corresponding period, hitting nearly $1.3bn. Liquefied petroleum gas (LPG) and methanol followed suit, each registering a growth of 25% and 23% in exports respectively to reach $1.2bn and $1.5bn.