|Saturday, 24 January 2004|
Iran to buy pure Lankan tea
by Pravin Mendis
Iran agreed to buy Sri Lankan tea under a Memorandum of Understanding (MoU) signed by the two governments at the conclusion of the Joint Economic Commission meeting at the Galadari Hotel last evening.
Iranian Minister of Economic Affairs and Finance Tahmasah Mazaheri and Commerce and Consumer Affairs Minister Ravi Karunanayake described the MoU as a win-win situation for the two countries.
"The Iranian tea production is less than the consumption. Iranians want better quality tea. Therefore we have agreed to a win-win situation of blending Sri Lankan tea with that of tea produced in Iran until a final settlement to the present crisis is found," Mazaheri said.
The MoU has agreed to the granting of technical assistance for Iran to produce and blend quality tea since tea produced in Iran is said to be of inferior quality at the moment which will see the lifting of the ban on Sri Lankan tea.
The Iranian Minister assured that the technical assistance program mooted by the MoU signed yesterday will not be a threat to Sri Lankan tea exports to Iran.
"The main purpose of the present ban is to get rid of the huge volumes of Iranian tea stocks and heavy lobbying from Iranian producers who have been hit by the introduction of Sri Lankan tea which is quite popular among the Iranians," he said.
The ban will therefore be enforced until local stocks are over, according to the Minister.
The Minister also said, the MoU will strengthen the importation of pure and refined Sri Lankan tea as opposed to the tea sold under the Sri Lankan label but is found to be adulterated and not its purest form.
"The smugglers will be lost as a result of this MoU and the reputation of Ceylon tea can be salvaged through this endeavour," Mazaheri said.
The current trade turnover between Sri Lanka and Iran amounts to approximately Rs. 20 billion of which the value of imports from Iran accounts to Rs. 17 billion, while Sri Lanka's exports to Iran amounts to only Rs. 3 billion, thus, leaving a balance of trade in favour of Iran.
The increased value of imports from Iran is attributable to Sri Lanka's import of crude oil from Iran. The main exports from Sri Lanka to Iran have continued to be as tea, dessicated coconut, natural rubber and garments.
The composition of Sri Lanka's exports to Iran will have to be diversified to include many value added products to exploit the potential or trading opportunities existing in Iran.
Produced by Lake House