Iran is one of the most interesting export destinations with high potential for expansion of Thai natural rubber and related product industry. Iran has a total population of around 80 million. It has a rich abundance of natural resources, including crude oil, natural gas and minerals. Iran shares the border with Kazakhstan, Uzbekistan, Azerbaijan and CIS countries with a total population of hundred millions, making Iran a center of distribution of goods to neighboring countries. Key Thai export goods to Iran comprise of rice, TV, air conditioner, natural rubber, computer, steel, iron, cars and autoparts, etc. Natural rubber and related products become more demanded as Iran has the biggest automobile industry in the Middle East. It is Iran’s second largest industry after oil and natural gas industry. Iranian tyre market is expected to grow at compound annual rate of over 12% during 2016-2021. Among major tyre manufacturers are Barez, Kavir, Yazd and Goldstone, Kumho, Hankook, Goodyear, Bridgestone, Continental, Michelin and Pirelli, TechSci Research reported.

Iran is the Middle East’s biggest rubber consumer. In 2015, Iran imported 40,100 tonnes of natural rubber for domestic consumption. In 2016 (Jan-Sept), Iran imported and consumed 37,000 tons of natural rubber (data from International Rubber Study Group), being raw material for other related industries in Iran, including automobile tyres, gloves and electronic appliances. In the current fiscal year (21 March 2016 – 20 January 2017), Iran imported 72,895,568 US$ of rubber from UAE (7.04%), India (2.08%), China (0.94%) respectively, Department of International Trade Promotion reported. From Thailand alone, Iran imported 16,900 tons of natural rubber at the value of 737 million Baht in 2016, Custom Department said.

Politically speaking, the U.S. government has sanctioned against Iran over its nuclear program. Recently, President Donal Trump’s ban on travelers from seven predominantly Muslim countries, the Iranian government announced it would stop using the U.S. dollar. The charge will take effect on March 21. However, Iran’s decision doesn’t affect its economy as it hasn’t been able to trade through US dollar. Trade between Thailand and Iran is still operated via third nations, viz. UAE, Turkey and India. One obstacle for Thai rubber sector is that Iran prefers buying rubber from Malaysia and China due to their comparatively more competitive and cheaper price as well as transaction ease, loan and longer payment due. In addition, Iranian government imposes strict trade regulations. All imported products must be approved by Iran’s Ministry of Commerce. Import document must bear registration number of importers, Department of International Trade promotion said. 

From the above data, it suggests that Iran is a potential market for natural rubber and tyres with likelihood of further expansion. The Thai Rubber Association would like to propose that Thai government, private and related sectors promote trade and investment and good international relation with Iran, which is an alternative rubber market to substitute major existing markets.