The barter was agreed in 2021 for oil imported in 2012
By:
Pramod Thomas
SRI LANKA will start bartering tea to Iran subsequent month in lieu of $250 million owed for oil, a Sri Lankan official stated final Friday (23), because the nation tries to elevate gross sales to a key market and shield its foreign exchange reserves.
The barter was agreed in 2021 for oil imported in 2012, however the trade was delayed after Sri Lanka’s unprecedented greenback scarcity final yr plunged the financial system into its worst monetary disaster in additional than seven many years.
“That is very well timed for us as a result of we get entry to an essential market and each Iran and Sri Lanka can commerce with out counting on {dollars},” Sri Lanka’s Tea Board Chairman Niraj de Mel instructed Reuters.
“The settlement was to ship $5m price of tea every month for 48 months, however we plan to start out with about $2m monthly.”
Globally in style Ceylon Tea is Sri Lanka’s highest international exchange-earning crop, brewing $1.25 billion for the cash-strapped nation final yr, in accordance with authorities knowledge.
Iran has been one in every of Sri Lanka’s major tea consumers, however exports fell from $128m in 2018 to $70m final yr as US sanctions on Iran hit commerce.
A big share of Sri Lanka’s tea is now shipped to Iran through the United Arab Emirates (UAE), official knowledge reveals, with the UAE greater than doubling its tea imports from Sri Lanka to $118m final yr from $48m 5 years in the past.
Beneath the barter programme, state-run Ceylon Petroleum Corp that purchased the oil will give rupees to the Tea Board to ship tea through Sri Lankan exporters.
Iranian tea importers will then pay riyals to the Nationwide Iranian Oil Firm, de Mel stated.
“We’re awaiting the ultimate paperwork and hope to start out exports from July,” he added.
Sri Lanka’s international trade reserves grew to $3.5bn on the finish of Might – a 14-month excessive – helped by elevated remittances and tourism inflows after securing a $2.9bn bailout from the Worldwide Financial Fund.
(Reuters)
