Iran allows Sri Lanka to settle oil debt using Ceylon tea
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According to Iranian media, Iran has agreed to use Ceylon tea as payment for a $251 million oil debt by Sri Lanka.
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Iran has accepted Sri Lankan debt of $251 million to be paid with Ceylon tea, according to Iranian media.
According to the head of Iran's Trade Promotion Organization, a written deal was reached to reimburse Iran's debt in the form of a monthly shipment of tea produced in Sri Lanka.
The oil was supplied to Sri Lanka approximately 9 years ago.
Although consumption has decreased in recent years, Ceylon tea made up almost half of the Iranian consumption of tea in 2016.
According to Alireza Peyman-Pak, the agreement will help sanctions-hit Iran to avoid using up limited hard cash to pay for shipments of the commonly used commodity.
He added that Iran and Sri Lanka have "great potential to develop mutual trade," noting that Iran's non-oil exports to Sri Lanka amount to less than $100 million yearly.
According to the Sri Lankan Plantation Industries Minister Ramesh Pathirana, Iranian banks sanctioned by the US will not be included in the transaction, detailing that the agreement does not breach any UN or US sanctions due to tea's classification as a "food item under humanitarian grounds."
