Tea for oil trade MOU this week

Sri Lanka and Iran will sign an agreement this week finalizing the terms of payment of Ceylon Tea exports.

Plantation Minister Navin Dissanayake told the Business Times that a delegation from Iran was due to arrive in Sri Lanka on October 8 to finalise the agreement to buy Ceylon Tea against the oil import debts.

It was noted that an MOU will be entered into between the two countries during this visit.

Sri Lanka Tea Board Chairman Lucille Wijewardena explained that the agreement would entail the settlement of US$250 million in total over a two year period at $5 million monthly.

This would mean that Ceylon Tea worth $5 million would be sold to Iran by local tea exporters and the payment would be settled by the Ceylon Petroleum Corporation to the exporters.

Mr. Wijewardena said that when a sale is carried out the Iranian buyer would make the payment to the respective oil company in Iran.

Based on past records of sales of Ceylon Tea to Iran, exporters will be allocated a certain amount of the transaction money monthly.

During the meeting the two sides will also work out the line of communication to be entered into to inform the Iranian authorities of the sales as and when they are carried out, he said.

Iran faces sanctions from the US and as a result there cannot be any trading and exchange of monetary transactions between countries even though tea is not on the list of sanctioned items. (SD)