During discussions with the US Charge d’Affairs Andrew Mann and the Commercial Officer in Colombo, local authorities and Plantation Ministry officials highlighted concerns on how the industry was impacted due to their inability to obtain payments for tea exports through Iranian banks.

In this respect, these matters were also raised during the US Secretary of State John Kerry’s recent visit to Colombo when the visiting delegation stated that they would provide a solution, reports the Economic Times of Sri Lanka.

It was found out that US and Iran had softened their relations and as a result it was possible to consider the Sri Lankan issue and give priority to it as well, the paper said.

Sri Lanka enjoyed 54 per cent of the Iranian tea market share in 2012 with exports amounting to 38, 125 MT that year. This came down by 22 percent in volume to 29, 260 MT in 2014 mainly due to the delay in remittances as a result of which exports dropped, SLTB statistics indicate. In 2013 tea exports to Iran were at 38, 416 MT.

Iran is the second biggest market for Sri Lanka’s tea exports that grabs 14 per cent of the total tea exports from this island nation. Iran buys the highest amount of teas from Colombo comprising 48 per cent of its market share of the total 80, 000 MT tea imports to Iran.

Though tea is not a sanctioned item since it is considered a food item however, the financial institutions in Iran that were imposed with sanctions find it difficult to make payments directly to Sri Lankan banks, else the latter too would come under sanctions.

Currently, exporters were using different routes to obtain payments from the Iranian market via India, Dubai or other Western states.

Earlier, Sri Lanka wanted to obtain trade concessions directly with Iran but since no fuel imports were carried out it was an impediment to any bilateral trade talks on tea exports, Sri Lanka Tea Board Director General Anura Siriwardena said.

He noted that India purchased oil from Iran and as a result they were able to come up with an arrangement to obtain payments for tea.

Sri Lanka competes with Indian orthodox tea which is quite popular there and the latter has now worked out a government to government agreement with the Iranian authorities to sell its produce.
(IRNA)