Iranian Rial

[screwball]

1. Economy
2. Business And Markets

Monday, February 27, 2017

Azerbaijan to Open Bank in Iran

 

An Azerbaijani bank will open its branch in Iran, Economy Minister Shahin Mustafayev told a press conference on the outcome of an Azerbaijani delegation’s visit to Iran. The issue was discussed during the Iran visit, Mustafayev said in Baku on Sunday. “I cannot say what bank it will be but I want to note that work is underway to create a relevant legal base. In addition, the issue of raising the status of Baku branch of Bank Melli Iran is being considered,” Mustafayev was reported as saying by Trend News Agency. Iran’s Central Bank Governor Valiollah Seif had earlier said that it plans to create a new bank with 100% Iranian capital in Azerbaijan. Seif said Bank Melli Iran’s branch in Azerbaijan will turn into an independent Azerbaijani bank and all the shares of the new bank will be owned by Bank Melli Iran.

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The Iranian Parliament on Sunday passed Iran’s general budget for the upcoming new year (March 2017-18).  The lawmakers put the figure at 3.98 quadrillion rials ($104.6 billion).

The general budget includes revenues of ministries and state institutions, which amount to 516.3 trillion rials ($13.5 billion), IRNA reported.

In the budget law of the current Iranian year (March 2016-17), the figure stood at 3.35 quadrillion rials ($88 billion), which is about 19% less compared to the new budget’s figure.

The parliament has been intensively reviewing the budget bill proposed by the government in December as the Iranian yearend draws closer. The MPs’ votes need the final endorsement of the Guardians Council—the body in charge of ascertaining the constitutional and Islamic nature of all laws—before it becomes law.

[screwball]

Budgets earlier! Interesting....

[screwball]

Ministry of Roads and Urban Development has signed 13 contracts worth $12 billion since March 2015 with investors from the Iranian private sector and foreign companies for investment in air, road, marine and rail transportations since March 2015.

Director General of the Ministry of Roads and Urban Development's Investment Office Mehdi Heydari also said two under-construction projects, namely the 370-km freeway worth 4.1 trillion rials ($1 billion) connecting Kerman to the Persian Gulf Port of Bandar Abbas and the 91-km freeway in Isfahan Province worth $123 million, have been implemented with domestic private sector investment.            

The latter project is expected to be completed in two years.

Heydari also highlighted a contract signed in January to renovate Iran’s aging cargo trucks.

Based on a trilateral contract signed by Road Maintenance and Transportation Organization (affiliated to the Ministry of Roads and Urban Development), Iranian Fuel Conservation Company and Mammut Industrial Group, 5,000 aging trucks are to be replaced with new ones.

The trucks are to be financed via leasing, with 80% of the costs covered by government facilities.

Established in 1992, the private Mammut Industrial Group is active in a variety of fields, including the manufacture of cargo and commercial vehicles, trailers and prefabricated buildings.

Its subsidiary, Mammut Diesel, which produces both CBU and CKD trucks, is the official sales and services representative of SCANIA—the Swedish manufacturer of heavy trucks.

According to Davoud Keshavarzian, deputy minister of roads and urban development, 120,000-130,000 vehicles in Iran’s cargo truck fleet have an average age of over 25 years.

As part of an agreement between the Ministry of Roads and Urban Development and Oil Ministry, 65,000 old trucks are to be replaced within five years.

In the aviation sector, Heydari referred to development projects to increase the capacity of Tehran’s Imam Khomeini International Airport. One of these projects, Salam Terminal, is being implemented by Mostazafan Foundation, a large state organization involved in large-scale economic activities.

The official also highlighted deals with Airbus and Boeing to purchase and lease 200 passenger aircraft. The contracts were signed in December and one Airbus plane has been delivered so far.

Two others are expected to arrive before the end of the current Iranian year on March 20, 2017.

The two major deals have an overall value of more than $30 billion at list prices, even though Iran says it has got substantial discounts from Boeing and Airbus.

According to ministry officials, Iran is paying only 15% of the prices, while the rest will be covered by global financing firms.

In the marine sector, Heydari said, a $330-million contract has been signed with Aria Banader Iranian Port & Marine Service Company to develop the southeastern port of Chabahar in Iran’s Sistan-Baluchestan Province.

As for the rail sector, he pointed to the high-speed railroad connecting Tehran to Isfahan, a central tourism hub. China Railway Engineering Corporation has signed a €1.7-billion contract to carry out the project.

“Work is in progress to attract domestic and foreign private investments for more than 80 major transportation projects,” he said. “This way, we can compensate for the shortage of government credit.”

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Iranian Parliament OKs Attracting $5bln of Foreign Finance 

News ID: 1340088 Service: Economy 

 February, 26, 2017 - 16:56 

TEHRAN (Tasnim) – The Iranian parliament approved a legislation that gives permission to the administration to attract five billion dollars in finance from foreign governments and financial institutions. 

During an open session of the parliament on Sunday, the Iranian lawmakers approved part of an article of the budget bill of the next Iranian year (which will begin on March 21).

By approving the legislation, the MPs gave permission to the administration to attract up to five billion dollars in financial facilities or grants from foreign governments, financial institutes or international organizations.

According to the legislation, the financial facilities are planned to be used in infrastructure projects and development plans of the country.

Last month, the vice governor of the Central Bank of Iran (CBI), Gholamali Kamyab, announced that the country has managed to attract 7.2 billion dollars in finance from three foreign banks.

There has been a new wave of interest in ties with Iran and investment in the country since Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) reached a nuclear agreement in July 2015.

The comprehensive nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions imposed on Iran when it came into force in January 2016.

[screwball]

Just now, screwball said:

During an open session of the parliament on Sunday, the Iranian lawmakers approved part of an article of the budget bill of the next Iranian year (which will begin on March 21).

How come part only? Which part haven't approved the bill with zeros removed?

[screwball]

Parliament approves next year budget bill

Tehran, Feb 26, IRNA – Majlis representatives on Sunday approved the budget bill for the next Iranian calendar year of 1396 (March 2017-March 2018) registering at Rls. 3.983,833 billion.

 

Member of Majlils Presiding Board Amir Hossein Ghazizadeh Hashemi declared the figure on Sunday. 

The figure is to be divided in public expenses and budget for ministries and state run organizations.

The parliament started debate on the bill last Monday and 10 MPs addressed in favor and 10 others against the bill in the legislative body.

President Hassan Rouhani had submitted the bill to the parliament on Sunday, December 9, 2016.

1430**2050

[tigergorzow]

18 minutes ago, screwball said:

How come part only? Which part haven't approved the bill with zeros removed?

SB,  Truly amazing information keep the good work up.   Loving all of these positive articles.   The good stuff is coming to fruition IMHO.

GO RIAL & GO IQD.....

[blueskyline]

Bravo Screwball . Priceless Work you have given .....

[screwball]

Foreign companies should seize the opportunity for collaboration and investment in the country's petrochemical sector, Marzieh Shahdaei, head of the National Petrochemical Company, said on Sunday.

"We should embrace the opportunities for cooperation with international companies that have access to advanced petrochemical knowhow because potential threats could undermine  the openings," IRNA quoted her as saying.

She acknowledged that economic stagnation and declining demand pose a risk to the international petrochemical market, adding, "we need to expand our petrochemical expertise  to be able to cut production costs, especially when the market slips into recession".

Tehran still faces a more pressing challenge due to the international sanctions. A historic deal between Iran and the six world powers in 2015 came into force in January last year, lifting many barriers against trade with Iran in exchange for limiting the country's nuclear activities.

But international investors say they are wary of doing business with Iran amid growing provocations against the Tehran government by the new US President Donald Trump who has called the nuclear deal "the worst agreement ever negotiated".

Kurt Bock, the chief executive officer of German chemical giant BASF, said last week that the company's oil and gas investment plans in Iran have been put on hold because of uncertainty over the status of economic sanctions.

"We can't see that the lifting of sanctions is being implemented at the speed that was initially expected," he said.

However Iran is pressing ahead with plans to reform its petrochemical industry as the country aims to diversify its economy that is largely dependent on oil export revenues.

"Our main goal is to gradually decrease the export of crude oil and natural gas and ratchet up petrochemical production and exports," Shahdaei said.

Iran holds the world's second-largest proven natural gas reserves (34 trillion cubic meters) and the fourth-largest crude oil reserves (157 billion barrels). Based on estimates, Iran can draw on its oil and natural gas reservoirs for at least 50 and 80 years respectively, excluding the new discoveries.

"With a population of 80 million, Iran is an attractive investment opportunity in the petrochemical sector," the NPC chief said.

Production, Export

Shahdaei said petrochemical production capacity now is around 65 million tons a year, but would reach 100 million tons per annum in five years and 150 million tons by the next decade.

Close to 19 million tons of petrochemicals, worth $10 billion, has been exported in the present fiscal year that ends in March.

"Twelve major petrochemical projects are under development with total capacity of 6 million tons a year," she said. Five projects are expected to be launched by the third quarter of this year.

[markb57]

Iran and Trump need to talk...

[millionaire in training]

1 hour ago, markb57 said:

Iran and Trump need to talk...

YES.....And they will .

[screwball]

5 hours ago, screwball said:

loan penalty waiver scheme, decreeing that the penalties pertaining to loans of under 1 billion rials ($26,500) will also be forgiven during the next fiscal year that begins on March 21.

On would think they are resetting their books come march 21st...

[screwball]

6 hours ago, screwball said:

Iranian Parliament OKs Attracting $5bln of Foreign Finance 

News ID: 1340088 Service: Economy 

 February, 26, 2017 - 16:56 

TEHRAN (Tasnim) – The Iranian parliament approved a legislation that gives permission to the administration to attract five billion dollars in finance from foreign governments and financial institutions. 

During an open session of the parliament on Sunday, the Iranian lawmakers approved part of an article of the budget bill of the next Iranian year (which will begin on March 21).

By approving the legislation, the MPs gave permission to the administration to attract up to five billion dollars in financial facilities or grants from foreign governments, financial institutes or international organizations.

According to the legislation, the financial facilities are planned to be used in infrastructure projects and development plans of the country.

Last month, the vice governor of the Central Bank of Iran (CBI), Gholamali Kamyab, announced that the country has managed to attract 7.2 billion dollars in finance from three foreign banks.

There has been a new wave of interest in ties with Iran and investment in the country since Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) reached a nuclear agreement in July 2015.

The comprehensive nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions imposed on Iran when it came into force in January 2016.

So i wonder if this is the currency swap arrangements rials for say euro, and as they said revalue their foreign currency reserves, has to be the value of the rial sitting in other central banks that changes? Just a thought? Anyone?

[blueskyline]

"Revalue foreign exchange assets " that we have seen a couple of times already. I would say yes Screw Ball

[screwball]

37 minutes ago, blueskyline said:

"Revalue foreign exchange assets " that we have seen a couple of times already. I would say yes Screw Ball

That's what believe!

[screwball]

1. Business And Markets

Sunday, February 26, 2017

Delving Deeper Into Debt

 

The Ministry of Economy has been given the go-ahead to sell up to 145 trillion rials ($3.8 billion) worth of short-term bonds, as parliament speaker, Ali Larijani, has criticized the sheer volume of debt issuance stipulated in the upcoming year’s budget.

The issuance, which is expected to take place before the Iranian yearend (March 20), includes 85 trillion rials ($2.2 billion) worth of Islamic Treasury Bills with a maturity of up to one year plus 60 trillion rials ($1.58 billion) of the same bonds with maturity of up to two years, IRNA reported on Saturday.

Iran’s treasury sold its first batch of ITBs to domestic investors in September 2015. The bonds were given as debt repayment to contractors who had the option to resell them in Iran Fara Bourse over-the-counter market or wait and redeem them at maturity. 

Mutual funds and investment companies are said to be the main customers of the bonds that are sold at a discount to their face value and bear no coupons, meaning they are traded at a lower price than their face value, but are redeemed at face value on maturity.

The funds raised by the debt issue, according to the chairman of Iran Planning and Budget Organization, Mohammad Baqer Nobakht, will be spent to finish the array of incomplete development projects across the country.

 Unfinished Projects

It is estimated that the completion of all the unfinished projects across the country requires upwards of $40 billion.

“The government had earmarked about 600-650 trillion rials ($15.78-17.1 billion) for completing these projects in the budget bill for the new Iranian year (March 2017-18). However, after the revision by Majlis Joint Commission–a parliamentary body responsible for reviewing the budget bill before its final ratification–on Wednesday, the figure was raised to 700-750 trillion rials ($18.4-19.7 billion),” Nobakht said.

The general budget for the new fiscal year, excluding revenues earned by ministries and state organizations and companies, totals 3.45 quadrillion rials ($90.5 billion). The figure shows a 17% rise compared to the budget law of the current year (March 2016-17).

Nonetheless, figures published by the Central Bank of Iran show the budget earmarked for the development sector has never been fully allocated in the past few years, as the government failed to mobilize the revenues it predicted.

“The main reason for the government’s failure in providing resources for development is that it fails to achieve its target revenues,” Mohammad Taqi Fayyazi, the head of Budget Team at Majlis Research Center, said.

“Only 1.44 quadrillion rials ($37.4 billion) of the 1.96 quadrillion rials ($50.9 billion) in projected revenues were materialized in the eight months of the current Iranian year (March 20-November 20). Logically, spending should keep pace with revenues.”

The government was supposed to earmark 387 trillion rials ($10 billion) to development projects in the eight-month period, whereas only 39% of this amount have been injected into these projects.

This, in fact, has been the case during the past three years, as the government only met 58%, 68% and 39% of its projected development spending during the fiscal March 2015-16, March 2014-15 and March 2013-14 respectively.

“Resources are allocated based on priorities. And the priorities include salaries and wages of state employees and buying back issued bonds and paying their interests … What little remains goes to development projects,” Fayyazi said.

 Government Debts

The government has accumulated debts to contractors of development projects. These debts started to pile up in the early 2010s during Iran’s financial crisis. The debt has been a chief instigator of the economic slowdown.

The total value of overdue payments to contractors by ministries has been unofficially estimated at up to $35 billion.

Iranian lawmakers voted on Saturday for the government to issue a further 50 trillion rials ($1.3 billion) worth of bonds and for municipalities to issue as much during the upcoming new year. 

The parliamentarians also authorized the government to sell 50 trillion rials worth of its fixed assets, including state properties.

The Securities and Exchange Organization of Iran has balked at undertaking the issuance of government debt, citing recession in the stock market.

The government pays up to 25% on its one year ITBs, while inflation stands at about 8.7%. With no risk, it is only natural that investors would shy away from stocks.

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Iranian Central Bank Governor Valiollah Seif. Source: Kyodo

Iran plans to unify the rial’s exchange rates with the dollar after the nuclear accordsigned with world powers is implemented, according to the country’s central bank Governor Valiollah Seif.

“We have a very stable currency market, but to proceed toward a unified exchange rate requires accelerating the country’s access to foreign currency,” Seif said in an interview in Frankfurt on Wednesday. “It can happen once the nuclear deal is implemented, maximum six months after that.”

 

from bloomberg 2015

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https://www.google.com.au/amp/s/www.bloomberg.com/amp/news/articles/2015-11-18/iran-to-unify-dollar-exchange-rate-once-nuclear-deal-implemented

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The 55th annual meeting of the central bank was also held with a six-month delay on February 13, 2016, headed by the president. During that meeting, CBI Governor Valiollah Seif presented the bank's performance report and changes in economic indicators during the tenure of the current government, with the president urging the banking system to adhere to monetary discipline in the post-sanctions era. 

It is expected that Seif will do the same this year, which also marks the fourth and final year of the administration's first term. Top CBI officials are now reportedly compiling and editing reports that are to be presented at the meeting.   

All members with voting rights, including the CBI governor or his deputy, must be present at the meeting for the talks and decisions to become officially binding. All decisions made in the meetings will only become effective with a majority vote.  

[screwball]

Just now, screwball said:

All members with voting rights, including the CBI governor or his deputy, must be present at the meeting for the talks and decisions to become officially binding. All decisions made in the meetings will only become effective with a majority vote.  

This is why this meeting is important last meeting 8 months president ordered a single forex currency..

[screwball]

Saeed Jalili

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Domestic Economy Desk

President Hassan Rouhani criticized the parliament for tying the government’s hands on access to Iran’s sovereign wealth fund amid the financial crunch caused by lower oil revenues.

“We created the wealth fund to use it on a rainy day. Now this is our rainy day and they [the parliament] ask us to deposit [more] cash [into the fund],” the president said on Sunday.

He censured the lawmakers for their vote to increase the share of wealth fund savings from Iran’s oil and gas revenues.

Reviewing the budget bill for the new Iranian year (March 2017-18), the parliament approved a law on Sunday, which requires the government to deposit 30% of revenues earned from oil and gas exports in the National Development Fund of Iran, up from 20% as per the budget law of the current Iranian year (2016-17).

As part of the Sunday’s decisions, the MPs also permitted the government to withdraw a total of $2.3 billion from NDFI next year, more than 50% of which will go to the defense sector.

As for the rest, the government will be able to inject $200 million into the Innovation and Prosperity Fund, allocate $300 million for modernizing irrigation, invest $300 million in rural water supply schemes and their development, grant $100 million to the Islamic Republic of Iran Broadcasting (the state radio and TV body) and spend $100 million to combat dust storms in southern provinces.

Chairman of NDFI’s governing board said in October that the fund has $68 billion in assets. The reserve, which collects oil price windfalls for infrastructure investment, is dwarfed by sovereign wealth funds of Iran’s neighbors in the Persian Gulf periphery. The UAE has nearly $800 billion and Saudi Arabia has $600 billion in their respective funds.

The approved withdrawals are far from what the government needs to cover the deficit that has forced it to drastically cut spending in both state bodies and infrastructure that suffer from underinvestment and underdevelopment in the past few years.

Iran’s budget deficit for the three quarters of the current fiscal year amounted to 268.9 trillion rials ($7 billion), according to the latest data released by the Central Bank of Iran.

The deficit forced the government to cut down spending associated with the expenditures of ministries and their affiliated bodies by 216.2 trillion ($5.7 billion) during the period.

Investment in development projects was also drastically cut. About 158 trillion rials ($4 billion) were invested in development projects, roughly a third of what the government intended to spend on development projects across the country.

The government only met 58%, 68% and 39% of its projected development spending during March 2015-16, March 2014-15 and March 2013-14 respectively.

  Sharpest Fall in History

“What Rouhani points out is correct,” Saeed Laylaz, senior economist close to Iran’s reformist camp, told Financial Tribune in an interview.

He added that NDFI was created in the first place to save resources when the government earns abundant revenues to use them in line with plans and needs when revenues drop.

“In recent years, government revenues saw the sharpest fall in history,” he said.

Oil revenues topped $110 billion in the Iranian year to March 2012, but the bearish crude market pushed them down to $14-15 billion in the last Iranian year (ended March 20, 2016).

“This is a rough time in terms of the government’s financial resources,” he said.

Rouhani said in his Sunday speech that, “when the government started its term, oil was sold for $108-112 per barrel. In 1394 (last Iranian year) there were months during which our oil was sold for $25 per barrel”.

Oil prices fell drastically in 2014, from over $100 per barrel to the record low of $30 in 2016, squeezing Iran’s hydrocarbon-dependent revenues.

Iran enjoyed sky-high crude prices for a few years, adjusting its spending with abundant revenues. But this posed a challenge when prices nosedived.

Other oil-producing countries recently agreed to limit production to drive up prices.

“Now that the conditions have improved, oil price has reached roughly $50 per barrel, meaning it has halved compared to the $108-112 it used to be, meaning our revenues were cut in half,” the president said.

“What did the other oil-rich countries do? The first measure they took was to tap into their reserves … Last year, Saudi Arabia used $100 billion from its wealth fund.”

Rouhani noted that Kuwait, Qatar, Azerbaijan and Russia also adopted a similar policy.

Laylaz, however, noted that the lack of resources is not the main challenge facing the economy, as “the whole economic system needs reform”.

“The economy has lost its efficiency. The government should think of a way to make the distribution of resources more efficient,” he said.

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President Hassan Rouhani described the restoration of market stability after a period of upheaval as the biggest achievement of his nearly four-year tenure that will end in August.

"Although our friends are sometimes divided over the biggest achievement of the government, I believe it's the return of calm and stability to the market," Fars News Agency quotes the President as saying on Monday.

Rouhani was speaking at the 56th annual meeting of the Central Bank of Iran held after an eight-month delay, with CBI Governor Valiollah Seif and Minister of Economic Affairs and Finance Ali Tayyebnia in attendance.

IBENA, a news website close to the central bank, had previously reported that the meeting would be held on March 1.            

The president referred to banks as the veins that provide the lifeblood to the country’s economic body, adding that they have been dealing with external and internal problems. He pointed to excessive lending and overdependence on the central bank, as well as lack of transparency in financial statements and interest rates as internal problems, urging the banking system to address them.

Referring to the recent unrest that rocked the currency market, Rouhani said that in spite of “temporary fluctuations that should not be ignored and must be reviewed to understand the precise cause”, the currency market has experienced a relatively calm atmosphere.

The Iranian foreign exchange market underwent massive fluctuations during the past few months, which saw the rial weaken to 41,500 rials to the dollar in late December. The greenback’s rally has since been tamed and it was exchanged for 38,100 rials on Monday.

“Because Iran does not import goods with the US dollar and opts for euro and similar currencies,” said the president, “our criterion in the market should also be the euro and not the dollar.”

In late January, Seif announced that Iran will stop using the US dollar as its currency of choice in its official financial reports from the new fiscal year that starts in March, giving strong hints that the country may opt for euro in releasing its key economic reports.

 Banking Relations

President Rouhani stressed the necessity of supporting the banking system, saying if a forward-looking economic momentum takes shape in the country the banks will also get back on track.

“Bank loans to economic sectors saw a suitable increase of 43% compared with the previous year and a rise of about 62% was registered for working capital loans, which is acceptable,” he said.

The president pointed to small- and medium-sized enterprises and the 160 trillion rials ($4.23 billion) earmarked for them in the current fiscal year.

“So far, 156 trillion rials ($4.126 billion) have been allocated to 22,800 SMEs,” he said, adding that by the end of the current Iranian year (March 20), the amount of credits extended to these businesses will surpass the initial target.

The inflation rate, which has been one of the main focuses of Rouhani’s government and has currently been brought down to single digits for the first time after more than two decades, was his another main talking point at the annual meeting.

He pointed out that the interbank rates, previously at 30% and then lowered to 18% in “a positive move”, must be reduced further to help the economy.

Rouhani called on banks to initiate interest rate cuts, stressing that “lenders must be rated and not painted with the same brush”.

“The central bank must announce the ratings of the banks, which will be a hard process and step up its [supervisory] pressures, which is the mandate of the central bank,” he said.

The president commented on Iran’s nuclear deal with world powers and its benign effects on the economy, adding that agreements reached outside banking activities have “almost been implemented 100%” but impediments persist in the banking sector.

“A part of these delays is because of violations and a lack of exact implementation of commitments by the US”, he said, coupled with the phobia on the part of big international banks in entering business with their Iranian counterparts.

“And we are the other half; perhaps the attractiveness of our side is weak,” he said, adding that fixing the balance sheets of the banks will only go so far in solving their problems.

Rouhani said Iranian banks must become stronger and increase their capital, but not by taking loans.

“Shareholders must spend their precious money. The government can also sell the stocks it has in a number of banks, foreigners can come and buy the stocks and the National Development Fund of Iran can help,” he said.

[screwball]

1 minute ago, screwball said:

The Iranian foreign exchange market underwent massive fluctuations during the past few months, which saw the rial weaken to 41,500 rials to the dollar in late December. The greenback’s rally has since been tamed and it was exchanged for 38,100 rials on Monday.

“Because Iran does not import goods with the US dollar and opts for euro and similar currencies,” said the president, “our criterion in the market should also be the euro and not the dollar.”

 

1 minute ago, screwball said:

In late January, Seif announced that Iran will stop using the US dollar as its currency of choice in its official financial reports from the new fiscal year that starts in March, giving strong hints that the country may opt for euro in releasing its key economic reports.

 

[screwball]

New Zealand has signed an agreement with Iran for the resumption of meat exports to the second-largest economy in the Middle East and North Africa region.

The Iranian Veterinary Organization and the New Zealand Ministry for Primary Industries agreed to an arrangement for facilitating the country’s frozen sheep and beef exports to Iran, according to a statement from New Zealand Primary Industries Minister Nathan Guy, who witnessed the signing of the agreement in Tehran with his counterpart, Iranian Agriculture Minister Mahmoud Hojjati on Sunday.

New Zealand’s meat exports to Iran failed to pick up following the lifting of sanctions last year due to disagreement over halal standards, New Zealand Herald reported on Monday.

“This is a crucial step for New Zealand meat companies, as they look to reenter the Iranian market,” Guy said.

Meat is New Zealand’s second-largest commodity export after dairy, and was worth $5.92 billion in 2016.

“The ministers also discussed an action plan for agricultural cooperation in the year ahead,” Guy said.

The two countries are also working on kiwifruit opportunities in Iran, where import restrictions prevent New Zealand from selling the country’s most valuable fresh fruit export.

Guy said New Zealand kiwifruit marketer Zespri International and Iran’s Ministry of Agriculture signed a statement of intent outlining undertakings to further explore commercial opportunities in Iran.

“Iran has well-established kiwifruit orchards and supply chains, and produces the fruit in New Zealand’s off-season,” he said.

Along with other western countries, New Zealand lifted sanctions against Iran in February last year after the country agreed to roll back its nuclear ambitions.

Leading a business delegation, including representatives from Fonterra, the meat industry association, Guy arrived in Tehran on Saturday.

“This will be the third ministerial visit to Iran in 12 months and reflects the growing importance of this relationship. This is an opportunity to strengthen our agricultural relationship, following the signing of an Agricultural Cooperation Arrangement in 2016,” he said.

In December 2016, New Zealand’s Trade Minister Todd McClay and his accompanying 30-strong trade delegation visited Tehran following the lifting of nuclear sanctions against the country. The visit was the country’s first trade mission to Tehran in 12 years.