An Expectation of Export Expansion on Iran Market

Up to 70.4 percent of Korean trading companies are expecting that their exports to Iran will expand when the international community’s economic sanctions on Iran are relaxed, while 30 percent of them are anticipating that the increase will be more than 50 percent.

This was quoted from the on-site survey result of 300 participants who took part in the “Presentations on the Outcome of Nuclear Talks with Iran and Sanctions on Iran” which was jointly hosted by the Korea International Trade Association and the Korea Strategic Trade Institute.

The trading companies expressed their expectations about Iran, the largest car market in the Middle East and the 4th largest oil producer, by responding that they were interested in making inroads into the automobile (30.3%) and petrochemicals (29.2%) sectors when the sanctions against Iran are eased.

In addition, to the question regarding the recent trend of exports to Iran, 42.1 percent of the respondents said the export volume was declining and 34.7 percent of them pointed to the buyers’ payment difficulties due to currency problems in Iran as the cause of the decrease in exports. On the other hand, it appeared that the tentative deal on Iran’s nuclear issue agreed on April 2 has not led to immediate trade expansion since 71.2 percent of the respondents said there was no change in terms of Iranian buyers’ movements.

Meanwhile, Korean exporters expressed excitement and concerns about the Iranian market at the same time. Of the respondents, 32.5 percent said increasing competition would be a possible factor to hinder the trade after the elimination of sanctions. Another 32.5 percent of the respondents chose the possible reimposition of sanctions on Iran due to Iran’s failure to fulfill the nuclear agreement. The uncertainty of the future outlook of sanctions on Iran was selected as the biggest bottleneck in trade with Iran.

Kim Chun-sik, head of the Trade Promotion Group of KITA said “The nuclear deal agreed on April 2 is rather a draft for the final agreement. Therefore, Korean exporters to Iran are required to pay close attention to the outcome of the negotiations until June 30. KITA will try to promptly deliver the results of the talks and information on Iran’s market trends in association with the Ministry of Trade, Industry and Energy (MOTIE) and the Korea Strategic Trade Institute (KOSTI)”. Regarding the difficulties of issuing the Confirmation of Unprohibited Trade and Investment brought up by the exporters, an official at KOSTI said “We will try to minimize the difficulties by positively reviewing the feedback from the exporters.” | Blog Magazine of korean electronics, brands and Goods

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