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. 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, being raw material for other related industries in Iran, including automobile, tyres and electronic appliances.

Iran is the Middle East’s biggest rubber consumer. In 2013, Iran imported 56,300 tonnes of natural rubber for domestic consumption. In 2014 (Jan-Sept), Iran imported and consumed 27,800 tons of natural rubber (data from International Rubber Study Group). UAE is Iran’s biggest source country of rubber, followed by China, Singapore and Malaysia, data from the Islamic Republic of Iran Customs Administration. From Thailand alone, Iran imported 6,719 tons of natural rubber with the value of 323 million Baht in 2014 (data from Thai Custom Department).

One of the major problems faced in trading with Iran is political constraint. The United Nations Security Council has imposed restrictive measures (‘sanctions’) against Iran, including financial restrictions, general or specific trade restrictions, etc., believing that Iran enriches uranium to build nuclear bombs. Additionally, the United States prohibited international financial institutes from buying and selling Iranian rial, derivatives and other financial instruments and from reserving Iranian rial. Thai banks also suspend financial transactions with Iran. Nevertheless, Iran applies highly restricted trade rules, complicated import regulations and high import tax, data from Thai Trade Center, Tehran.

From the above data, it suggests that Iran is a promising market that attracts trade and investment, especially in rubber industry. However, Thai entrepreneurs are advised to take into consideration burden of financial transactions; therefore need to consult Thai banks clearly prior to any remittance, L/C opening and payment, and to consult Iranian trade and investment partners about financial transaction method also. Alternatively, Iranian traders may remit through small and medium banks in Europe or Dubai to Thai exporters.

In response to the above issue, Director of Thai Trade Center in Tehran, Iran, Mr.Srawut Chankao led a delegation of Iranian rubber importers headed by Tire Retreading Association of Iran to vist Thai rubber exporters in order to negotiate and consult about solutions to import-export issues on 27 January 2015 at Centara Hotel, Hatyai. The Thai Rubber Association was pleased to host a dinner for the Iranian delegation at Maroc de Nesthome Restaurant, Hatyai. The delegation also visited a plant of Thai Hua Rubber Public Co., Ltd. (Chalung Branch) during 27-28 January 2015.

All these activities contribute to closer trade corporation and relationship, which is an important part of the trade and investment expansion of Thai rubber industry to Iranian market and its neighbouring countries.