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Industry Min.: Removal of competition ceiling on Commodity Exchange transactions makes rente-seeking history


The minister of industries, mines and trade has said that the government has plans to facilitate the supply of foreign exchange, raw materials and working capital the production units need.
Mohammad Shariatmadari, who was visiting Aligoudarz in Lorestan Province, expressed hope that new steel and petrochemistry policies can set the stage for the provision of raw materials and for the production and better distribution of steel and petrochemical products.
He blamed the common problem of industrial units in the area on changes introduced to supplying hard currency in the country and said, “Thanks to the new decisions of the government’s foreign exchange policy commission, the forex problems of production units will be resolved in stages through the Integrated System for Hard Currency Transactions (known by its Persian acronym NIMA). This would help production and industrial units to access hard currency resources with greater ease.”
He said his ministry is making efforts to clear the raw material the production units need from customs offices across the country.
The minister then brought up the issue of removing the limitations surrounding competition by steelmakers in the Commodity Exchange and said easing such restrictions in the Exchange has paved the way for production units to have access to raw materials at a competitive price. “This helps get rid of rente-seeking when it comes to steel production processes.”    
Shariatmadari also talked about his visit to two industrial units – a rebar production plant and a petrochemical plant – and said, “The production units in the province are making quality products. They were complaining about the shortages in the petrochemical sector, though. The removal in the Commodity Exchange of restrictions surrounding transactions or sales of petrochemicals, especially polymer products has helped solve this problem. This will help make market transactions and supply of raw materials for various petrochemical units easier than before.”   
Shortage of working capital is the common problem production units are grappling with, the minister said, adding the issue is up for discussion in the Money and Credit Council.
Shariatmadari concluded, “We hope a decision by the Council to raise credit ceiling of production units can help make this problem a thing of the past.”    


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