Potential to double tea exports to Iran

The easing of sanctions on Iran will deliver the much needed pick-me-up to Sri Lanka’s troubled tea industry by allowing the resumption of direct exports to one of its main markets, a government official said last week.

Although tea was not on the list of products banned from being exported to Iran over its nuclear program, restrictions on banking meant exporters had to go through risky and expensive channels to be paid.But as part of the deal agreed on Tuesday with major powers, the currency restrictions are being lifted, effectively allowing the Islamic Republic to resume free trade with countries such as Sri Lanka.

“Direct exports to Iran will mean a better deal for our producers. This is very welcome,” said Finance Minister Ravi Karunanayake.“Our tea industry has been going through a very difficult patch. Opening of the Iranian market will be a big boost,” he told reporters.Before the restrictions on banking put the squeeze on exports, Iran was the largest overseas market for Sri Lanka’s trademark Ceylon Tea.Even after the restrictions were rolled out in 2008, over 30 million kilos (66 million pounds) of Sri Lankan tea was sold to Iran.Industry bosses said exports to Iran could double, which would be a fillip to a sector that has been hit by a global glut of tea and an increase in the domestic cost of production. “With sanctions gone, there is a potential to double tea exports to Iran,” said Chief Executive Officer, Asia Siyaka Commodities, Anil Cooke. He said a majority of tea growers in Sri Lanka will see better demand for their produce while Iranian consumers will also benefit thanks to lower intervention costs in directly importing Ceylon Tea.

- AFP