Ceylon Tea buying likely to drop amid WA tensions
Sri Lanka’s tea industry is concerned with the escalation of tensions in West Asia as the winter buying season begins and orders are expected to drop this year owing to an unsound financial situation in most markets.
National Chamber of Exporters (NCE) Chairman Jayantha Karunaratne explained, This is the tea buying season and with many countries in the West Asian region particularly the key tea markets for Ceylon tea facing severe financial issues they expect a drop in orders.
The tea trade depends on Lebanon, Syria, Iran and it could spread to others in the region, it was noted insisting that “If this escalates anything could happen.”
Reuters reported on October 1 that Israeli Prime Minister Benjamin Netanyahu has promised that Iran would pay for its missile attack against Israel on Tuesday, while Tehran said any retaliation would be met with “vast destruction”, raising fears of a wider war.
And with the US backing its longtime ally Israel, Iran’s armed forces have reportedly said direct intervention by Israel’s supporters against Tehran would provoke a “strong attack” from Iran on their “bases and interests” in the region.
Mr. Karunaratne noted that they have experienced similar war situations breaking out in West Asia and believe this would be a repeat of what occurred in the past. “Definitely volumes will come down,” he said adding that they would experience a drop in exports to that region.
Immediately there could be a drop in tea exports and with the strengthening of the rupee the exporters are facing more concerns, he noted.
Meanwhile, in the wake of last week’s reprisals by Lebanon against Israeli attacks airlines have been altering their flight path from flying over Iraq to flying over Egypt which was followed by SriLankan Airlines as well, SriLankan Airlines spokesman Deepal Perera told The Sunday Times Business.
He noted that while they have no flight operations to any of the countries under conflict they are relatively out of the conflict zone. In fact most destinations for SriLankan Airlines are headed to Europe and other parts of West Asia.
The only concern at present is the possibility of an increase in crude oil prices that could have an impact on their yields of the airline, Mr. Perera said.
However, shipping experts point out that unless the tensions spread to many other countries in West Asia they do not expect any issues except for the concerns due to the increase in crude oil prices.
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