Iran, Turkey sanctions hurt Ceylon Tea

As the United States sanctions against Iran has left Sri Lanka still working out an arrangement for its tea exports, similar actions reported to be initiated against Turkey would aggravate the industry’s problems.

Sri Lanka is still working out the arrangement for the payment of its tea exports to Iran via the debts to its oil companies even as a delegation arrived in the country just last week.

“We had talks with the delegation that came here from Iran – they wanted to take the draft of the MOU and discuss in Teheran before signing it,” Sri Lanka Tea Board Chairman Lucille Wijewardena said on Wednesday.

He noted that the Iranians would have to now come back to Sri Lankan authorities on the feedback from the authorities in Teheran before signing the document.

The Iranian delegation had expressed concern over the limit set on US$5 million worth of exports per month as they want it to be increased. Sri Lanka has stated that this would be the minimum amount they could work around as it is based on the capacity of the Ceylon Petroleum Corporation’s (CPC) to pay back.

In this respect, the Iranian officials that arrived “didn’t want to commit until they get confirmation from Teheran”.

In the wake of these developments the industry is likely to face another issue if the US should impose sanctions against Turkey another key market for Ceylon Tea.

A Reuter report stated that Republicans in the U.S. House of Representatives planned to introduce legislation on Wednesday that will impose sanctions on Turkey in response to Ankara’s incursion into Syria.

At present Turkey buys around 30 million kg of Ceylon Tea and is one of the key export markets.

Meanwhile the SLTB in its drive for replanting to be carried out on the plantations will be obtaining the plants from the Regional Plantation Companies (RPCs) and other registered nurseries, Mr. Wijewardena said. In this respect, the board will be advertising for the purchase of plants next week to be given out to commercial nurseries.

In the meantime, SLTB will be launching its global campaign in Ukraine on October 23 and 24 having completed a successful promotion in Russia. Sri Lanka is set to continue its promotional drive into Japan and China as well early next year.