Tea Industry In Crisis After Sanctions On Iran

• Thousands of jobs at risk

By Indika Sri Aravinda

The  tea industry, the country’s second largest net foreign exchange earner is facing a potential crisis as a result of the economic sanctions imposed on Iran by the US government, the Sri Lanka Tea Board said.
Tea Board Chairperson Janaki Kuruppu told The Sunday Leader that Sri Lanka exports 25 million kilos of tea to Iran annually.
She said that the sanctions could affect the payments being made to Sri Lanka by Iran for the tea and this could have a spiraling effect on the tea industry as a whole.
Kuruppu said that over 20 tea exporters in Sri Lanka are involved in exporting tea to Iran and over 2 million people are employed in the Sri Lankan tea industry.
If Iran is unable to pay Sri Lanka in US Dollars for the tea it purchases from Sri Lanka then thousands of people employed in the local industry could also be affected.
Kuruppu said that urgent talks are now being held between Iran, Sri Lanka and the US regarding the sanctions and its possible impact on the tea industry.
Meanwhile Tea Commissioner General T. Hemaratna said that the Central Bank was also monitoring the issue.
Hemaratne said that Sri Lanka exports tea to about 145 countries with the main importers being Russia, Iran and Dubai.
The United States and the European Union announced plans earlier this year to impose punitive sanctions on Iran in an effort to force the Iranian government to cease the development of its nuclear program – which they say is aimed at producing a nuclear weapon despite Tehran’s claims that its nuclear program is purely for civilian purposes.
Meanwhile China, India and Japan – three of Asia’s largest oil consuming nations – are planning to reduce imports of crude oil from Iran by at least 10 percent in response to mounting pressure from the United States and its Western allies to impose sanctions on the Middle Eastern state. The three countries together purchase nearly half of Iran’s crude oil exports.