Lifting Iranian sanctions brews well for Ceylon Tea
The US ending economic sanctions on Iran is eyed with optimism by the Sri Lankan tea industry which noted that this could boost prices in future and create avenues to directly deal with banks between the two countries. The Sri Lankan tea industry had been awaiting this move by the US for a long time that could allow the two countries to carry out banking directly between them and reduce the delays in transferring payments for tea exports, Tea Exporters Association (TEA) Chairman Rohan Fernando said in an interview with the Business Times on Monday.
He noted that in the wake of these developments the TEA Secretariat would be writing to the Sri Lanka Tea Board (SLTB) to call for a meeting of the state banks, the Treasury and the Central Bank to see how they could move forward with the sanctions lifted so that the banking system will get the directives of lifting of the sanctions. Mr. Fernando explained that if handled properly the demand at the auctions should improve – the prices should increase because the exporters should have more money to buy more stocks.
At present exporting tea to Iran is being carried out but dealing with their banks is an offence as a result of which the traders are obtaining money from banks in Dubai and other places through financial institutions outside the trading country, Mr. Fernando explained. He added that this involves delays and various other issues connected to transfers since banks refuse to accept any form of documents between Sri Lanka and the Iranian banking system.
Plantations Minister Navin Dissanayaka told the Business Times that with the sanctions on Iran lifted, Sri Lanka could now trade directly and the payment problem could be sorted out. “It will also give (us) an edge in the market and gain about 4-5 per cent more (in the market),” he said. Sri Lanka is said to have obtained 44 per cent of the Iranian market for tea. This year Sri Lanka is looking at achieving an export target of at least 350 million kg, the minister said.