The Sri Lanka Tea Board has announced that $60 million of the $251 million owed to Iran for fuel imports since 2011 has been settled through tea exports.
This initiative is part of a strategic agreement between the Sri Lankan and Iranian governments to use tea exports as a means of debt repayment, according to a statement from the Ministry of Agriculture and Plantation Industries.
The accumulated debt stemmed from various economic challenges, including the COVID-19 pandemic, European sanctions imposed since 2011, the collapse of the tourism industry following the Easter attacks, and a general economic downturn that led to a shortage of dollars.
Sri Lanka Tea Board Chairman Niraj De Mel confirmed that as of July 15, $60 million of the outstanding payments have been cleared through tea exports. He noted a significant increase in the volume of tea exported to Iran, which has tripled recently, aiding in the debt settlement process.
In the first five months of 2024 alone, Sri Lanka exported 4.98 million kilograms of tea to Iran, compared to 1.85 million kilograms during the same period in 2023.
The agreement not only reduces Sri Lanka’s financial burden but also strengthens trade relations between the two countries. The ministry emphasized that this arrangement illustrates how innovative economic solutions can address financial challenges and bolster bilateral ties.
