Iranian tensions, US tariffs a new setback
The Iranian barter deal to pay off Sri Lanka’s oil debt continues to be facing ‘documentation’ delays causing concern to tea exporters amidst the growing tensions in Iran and pressure from the US.
By the end of last year and this time also there was delay in the documentation process from Iran but it gets cleared, Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Netthikumarage told the Sunday Times Business. Under the barter deal, the CPC –which is unable to pay for past purchases of crude oil from Iran due to UN sanctions – instead pays local tea exporters for goods shipped to Iran.
He noted that they have been experiencing this kind of delays in the processing of the documents needed to be sent to Colombo once the tea is sent to Iran. However, he noted that although these delays could take upto a month or a maximum of about two months Iran does comply and clear it.
The MD explained that the CPC would get in touch with the Iranian National Oil Company directly to ascertain if they received the tea stocks. Once this is confirmed the Iranian authorities then gets it cleared and sends the required documents to Colombo.
Imperial Teas Group Chairman Jayantha Karunaratne said that they are “waiting for things to settle down” in Iran as the Rial (Iranian currency) is plummeting and tensions are spreading.
“We want to delay and wait and see” he said adding that currently communication with Iran is also being hampered.
Each exporter is taking their own call on their decision to export to Iran or not at present and it is learnt that some shipments are currently on their way to Iran as well.
It is learnt that Sri Lankan government is also observing the current developments amidst the new warnings by the US to face 25 per cent tariff on countries exporting to Iran. In the face of this looming uncertainty concerns are now shifting towards Sri Lanka’s apparel exports to the US and whether this could be impacted as well.
Joint Apparel Association Forum (JAAF) Spokesman Yohan Lawrence said that at present they do not know how this announcement will impact but pointed out that “it’s concerning”.
At the moment the industry is waiting for the executive order in this regard by the US to be published to understand what this new tariff would mean, he said.
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