Russia: Export through Iran is complicated by transport discrepancies

Updated Nov 20, 2023
The development of the North-South ITC will significantly increase agricultural exports from the southern regions of the Russian Federation - by 2030, according to market participants, it could reach up to 30 million tons. But the development of trade relations with Iran is hampered by the peculiarities of the organization of financial settlements, as well as the shortage of port facilities and ships in the Caspian Sea. Russian companies promise to tackle the latter problem in the near future. At the same time, the low cost of diesel fuel in Iran, which ensures low cost of road transportation, calls into question the profitability of railway projects.
The export potential of grains in the geographic zone of the North-South international transport corridor will be up to 30 million tons by 2030, Arkady Ivanov, development director of TransAsia Logistics Group, said at Transport Week 2023. According to him, the market for grain and flour “is huge and does not even require transportation from Iran by sea: the population of Iran’s neighbors, such as Afghanistan, Iraq and Pakistan, connected by land borders, is 310 million people, plus 80 million Iranians, that’s almost 400 a million people who eat three tortillas a day is a billion tortillas a day.” But the top manager also notes a number of obstacles to the development of transportation of Russian goods along the corridor. According to him, the main problem is payments for export-import and logistics services. In particular, in road transport, payments are made according to the Arab hawala system (an informal system based on the offset of claims without the formation of financial ...
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