Iran buying slows down at tea auction
Iran has stopped purchasing tea from Sri Lanka as a result of its own economic crisis that has led to the Iranian authorities bringing to a halt the issuing of licences for the import of varied goods including tea.
Colombo Tea Traders Association Chairman Jayantha Karunaratne pointed out that Iran has stopped issuing licences and currencies to its importers due to their own economic reasons.
The tea industry in Colombo believes this might be a temporary halt as the purchasing has stopped now for about a month.
Mr. Karunaratne also said that there is also an investigation being carried out regarding one importer who is said to have obtained all the allocations made for procurement of tea based on wrong information being given to the Iranian authorities.
Tea industry sources said that the allocation made in Iran for purchasing tea has become unavailable for their usual importers.
Iran is one of the leading buyers of Ceylon Tea with purchases amounting to 15,127 metric tonnes (MT) in 2020 and 22,263 MT in 2019. Sri Lanka’s exports of tea to Iran were worth US$73.99 million in 2022, according to the UN COMTRADE database on international trade.
It is learnt that importers who approached the Iranian Agriculture Ministry for the allocations for the procurement of tea were turned down following which an investigation has been called for.
Sources point out that due to investigations being carried out in Iran concerning monies not been made available for the purchase of teas by Iranian importers it will take time until around mid April for this to conclude. Moreover, with the Iranian New Year celebrations scheduled in late March it is unlikely that stocks will get picked up at the auctions.
“So we are basically hampered although there was a bit of speculative buying recently,” one source said.
However, Sri Lankan importers are more concerned about the sharp appreciation of the rupee as a result of which tea exporters have noted prices to have dropped by Rs.30 below last week’s rates.
He pointed out that the impact of the rupee appreciation could be more than the temporary restriction of Iranian purchases.
The rupee appreciation will have a major impact on the exporters also it is good for the country.
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