Tatyana Gracheva

According to Ambassador of Armenia to Iran, efforts are made to increase Iran-Armenia annual trade volume to one billion US dollars, due to the need to increase the volume of trade between these two countries.
As Ambassador Arsen Avagyan said in his Friday evening meeting with the governor-general of East Azarbaijan Province, Iran’s neighboring provinces with Armenia have great importance for his country. Establishment of a consular office in Tabriz has also been requested.
Avagyan said that the Armenian side is ready to have face to face meetings with foreign merchants and businessmen, and West Azarbaijan province merchants and officials are invited to visit Armenia’s Syunik Province.
Araks border river has also been mentioned by Ambassador Avagyan due to its significant importance for both Iran and Armenia. The question of environment protection arose, and one of the mines has been shut down till required moves will be made to eliminate the environmental hazards.
According to the Ambassador, buying the manufactured goods in East Azarbaijan Province is among Armenia’s priorities, as it is the closest transit route for Armenia.
That province is quite ready for boosting trade with neighboring countries, including Armenia, as the governor of East Azarbaijan Province said, and he emphasized that increasing interactions with neighboring countries is one of the basic policies of the 13th Government, and the provinces have the required authorities for the purpose.
According to Abedin Khorram, increased trade and business between the two provinces of East Azarbaijan and Syunik is quite favorable for Iran.
The supreme scientific status of East Azarbaijan Province in Iran has also been referred to, and province’s readiness for establishment of a joint science and technology park, which can be turned into a regional export hub, has been announced.
Khorram underlined the great importance of Araks River for Iran, and therefore major steps to control the entry of mining sewage water into it are expected from Armenia.

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The recent appreciation of the dram and the dollar depreciation (the contracts for export are mostly signed in dollars) has become a problem for companies exporting from Armenia. The price of raw material has also increased because of inflation. Logistic problems have also appeared.
The USA is the main export destination of Armavir Fruit processing agricultural goods (canned fruits and vegetables, dried fruits). According to the company founder Hayk Manukyan, the fluctuation of the foreign currency and the appreciation of the dram is their main problem at this moment. Luckily, state assistance programs helped people to build orchards, greenhouse farms and to increase the volumes.
He says that any problem is automatically transferred to rural people, who are not able to process that volume under dram appreciation. The price changes very little over the years. If it increases, a market will be lost.
Dollar decreasing by around 20% makes exporting some goods unprofitable for the company now. Exports continue in spite of financial loss in order to save the market.
According to logistic company Spinnaker Group co-founder Norayr Gevorgyan, the fluctuation of the foreign currency is a problem for all exporters. The worst thing is that the dram appreciation happened immediately.
The calculation of the prices in the field of cargo transportation in dollars makes price increase as most of the expenditures in Armenia is in drams.
The opinion of the Central Bank, expressed by CBA Governor Martin Galstyan, is that serious problems will be caused by the artificial depreciation of the dram, for example, a new inflationary wave that will impact all citizens of Armenia, including exporters.
The Upper Lars border checkpoint regular shutting down because of bad weather and major queues there are also a problem for exporters. Armenian cargo trucks suffer most of all.
Russia also imports Armavir Fruit goods, but not much. According to Hayk Manukyan, major agreements with the partners of the Russian market will be signed soon. It makes the problem of Lars checkpoint very relevant, taking into account imports made for reprocessing.
Contracts make Lars very important for each exporter. If it is not solved, reserves in Russia are necessary in order to fulfill the contract.
According to Spinnaker Group co-founder Norayr Gevorgyan, there have always been problems with Lars checkpoint in every season, but this year the major flow of vehicles from other countries which cannot travel to Russia via Europe supplemented this difficulty. Lars served as an alternative route for them, but it couldn’t serve so many cars.
The exports of apricots stopped this year, because queues made it impossible to pass Georgia quickly.
They expect to launch a ferry communication to mitigate the problem of Lars. They are delaying the launch previewed for June 15th because the permission has not been granted by the Dutch company, the Poti port operator, yet, and it has also imposed sanctions against Russia. This measure will not solve the problem completely, as a ferry can’t transport all the goods exported from Armenia.
Inflation affects many countries. According to Hayk Manukyan, the decline of foreign currency doesn’t make the prices fall. The economy could be negatively affected by the dram depreciation from inflation perspective. He proposes to support exporting companies.

According to Spinnaker Group founder Norayr Gevorgyan, the fluctuation of a foreign currency is a global problem and does not depend on Armenia only. It makes exporters suffer, and it is necessary to provide a respective approach to them.
Without compensation, the situation will become very difficult for suffering sectors. They should provide a sectoral assistance to exporting companies, having contracts in dollar.

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