Exports from Dubai to Iran declined by 8 per cent in value last month compared with June last year.
Dubai's trade with Iran slows due to downturn
Exports from Dubai to Iran declined by 8 per cent in value last month compared with June last year. Iran remained the top export destination for members of Dubai's Chamber of Commerce and Industry, however, with Dh4.7 billion (US$1.28bn) of trade leaving the emirate to cross the Gulf. Total exports reached Dh27.1bn in the first six months of the year, according to figures the chamber released yesterday.
"The volume of shipments through the UAE has decreased due to the global recession, but the portion of trade to Iran has declined more because of sanctions," said Morteza Masoumzadeh, the head of the Iranian Business Council in the UAE and the owner of a company that imports goods from Europe and re-exports them to Middle East and African countries. Sanctions against Iran were tightened last month when the UN Security Council approved new restrictions on financing and military goods, limiting letters of credit for shipments to the country.
EU sanctions focused on trade, transport and the gas and oil industry could come into force within weeks. Iran was the UAE's fourth-biggest trading partner in the first quarter of the year behind India, China and the US. Non-oil exports of Dh173 million from the UAE to Iran were overshadowed by re-exports of Dh2.4bn, making Iran the second-biggest destination for onward goods from the UAE after India, figures from the Ministry of Foreign Trade show.
Despite a slowdown in global trade, the value of Iran's trade with the UAE rose more than 10 per cent last year from 2008, elevating Iran to the Emirates' fifth most important trading partner. Re-exports to Iran last year increased by 16 per cent to Dh26bn, bucking a 9 per cent fall in the UAE's total re-exports in the year. Machinery and mechanical and electrical appliances have accounted for about 30 per cent of the total onward sales of goods to Iran in recent years, followed by transport equipment. The flow of goods has also included vegetable products, textiles, base metals, plastics and rubber.