Kiwi from Iran: Sanctions and Recent Currency Appreciation Decreases Exports

Published Sep 2, 2019

Iran is one of the major kiwi producing and exporting countries in the world. In the 2019 season, export volume and value is expected to decrease by around 20% compared to the last season. The decrease in Iranian kiwi export is driven by the appreciation of the Iranian Rials over the last 6 months and the US sanctions on Iran’s banking system.

Iran is one of the major kiwi producing and exporting countries in the world. The expected kiwi production in Iran for the 2019-20 season is around 400K tons, which has increased from 2018 due to increased harvest area and favorable rainfall. In 2018, Iran exported around 140K tons of kiwis valued at around 96.6 million USD. The 2019-20 export season has not started yet in Iran, but both the export volume and value is expected to decrease by around 20% compared to the last season.

The decrease in Iranian kiwi export is driven by the appreciation of the Iranian Rials over the last 6 months and the US sanctions on Iran’s banking system. The currency appreciation makes the Iranian kiwis more costly for importers. Furthermore, due to the sanctions on Iran’s banking system, Iranian exporters cannot trade with importers who insist on having direct banking transactions. EdmanFruit, an Iranian kiwi exporter, can only trade with importers who are willing to make cash payments or importers who are willing to trade with EdmanFruit through the company’s partners located in Turkey and Dubai.

The main export destinations for both Iranian kiwis are Russia, Iraq, India, and the UAE. Similarly, the main markets for EdmanFruit are India and Russia. Italy, the 2nd largest kiwi exporter in the world, has the same target markets as Iran and the company. As a result, Italian kiwis are the main competitor for Iranian kiwis. The Iranian kiwi season starts around a month earlier than the Italian season, which gives the Iranian kiwis an opportunity to enter the market before its main competitor. Iranian kiwi season starts in September, and the main exporting season is between October and February.

Furthermore, Russia recently extended a ban on fruit imports from the European Union. As a result, major European kiwi exporters such as Italy will not be able to export to Russia. This presents an opportunity for Iranian exporters to increase their market share in Russia. The Russian fruit importers have been working with Iranian exporters for a long time, so they are familiar with working around the banking sanctions.