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Sri Lanka is reportedly set to start out bartering tea to Iran subsequent month in lieu of USD250 million owed for oil, because the nation tries to raise gross sales to a key market and defend the foreign exchange reserves.
The barter was agreed in 2021 for oil imported in 2012, however the alternate was delayed after Sri Lanka’s unprecedented greenback scarcity final 12 months plunged the economic system into its worst monetary disaster in additional than seven a long time.
Talking to the Reuters Information Company, Sri Lanka Tea Board Chairman Niraj de Mel has mentioned the programme is a well timed initiative because the nation will get entry to an necessary market and each Iran and Sri Lanka can commerce with out counting on {dollars}.
Chairman Niraj de Mel has mentioned the settlement was to ship USD5 million value of tea every month for 48 months however initially will probably be round USD 2 million per thirty days.
Globally standard Ceylon Tea is Sri Lanka’s highest overseas exchange-earning crop, brewing USD 1.25 billion for the nation final 12 months, based on authorities information.
Iran has been certainly one of Sri Lanka’s most important tea patrons however exports have fallen steadily from USD 128 million in 2018 to USD 70 million final 12 months as U.S. sanctions on Iran hit commerce.
A major share of Sri Lanka’s tea is now shipped to Iran by way of the United Arab Emirates (UAE), official information exhibits, with the UAE greater than doubling its tea imports from Sri Lanka to USD 118 million final 12 months from USD 48 million 5 years in the past.
Below the barter programme, the Ceylon Petroleum Company that purchased the oil will give rupees to the Tea Board to ship tea by way of Sri Lankan exporters.
Iranian tea importers will then pay riyals to the Nationwide Iranian Oil Firm.
Chairman de Mel added that, “We’re awaiting the ultimate paperwork and hope to start out exports from July.”
Sri Lanka’s overseas alternate reserves grew to USD 3.5 billion on the finish of Might – a 14-month excessive – helped by elevated remittances and tourism inflows after securing a USD 2.9 billion bailout from the Worldwide Financial Fund.
Supply: Reuters
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