Sri Lanka is reportedly set to start bartering tea to Iran next month in lieu of USD250 million owed for oil, as the country tries to lift sales to a key market and protect the forex reserves.
The barter was agreed in 2021 for oil imported in 2012, but the exchange was delayed after Sri Lanka’s unprecedented dollar shortage last year plunged the economy into its worst financial crisis in more than seven decades.
Speaking to the Reuters News Agency, Sri Lanka Tea Board Chairman Niraj de Mel has said the programme is a timely initiative as the country will get access to an important market and both Iran and Sri Lanka can trade without relying on dollars.
Chairman Niraj de Mel has said the agreement was to send USD5 million worth of tea each month for 48 months but initially it will be around USD 2 million per month.
Globally popular Ceylon Tea is Sri Lanka’s highest foreign exchange-earning crop, brewing USD 1.25 billion for the country last year, according to government data.
Iran has been one of Sri Lanka’s main tea buyers but exports have fallen steadily from USD 128 million in 2018 to USD 70 million last year as U.S. sanctions on Iran hit trade.
A significant share of Sri Lanka’s tea is now shipped to Iran via the United Arab Emirates (UAE), official data shows, with the UAE more than doubling its tea imports from Sri Lanka to USD 118 million last year from USD 48 million five years ago.
Under the barter programme, the Ceylon Petroleum Corporation that bought the oil will give rupees to the Tea Board to ship tea via Sri Lankan exporters.
Iranian tea importers will then pay riyals to the National Iranian Oil Company.
Chairman de Mel added that, “We are awaiting the final documents and hope to start exports from July.”
Sri Lanka’s foreign exchange reserves grew to USD 3.5 billion at the end of May – a 14-month high – helped by increased remittances and tourism inflows after securing a USD 2.9 billion bailout from the International Monetary Fund.
The 9th China-South Asia Expo, which opened on June 19 in Kunming, China, will conclude tomorrow (June 24).
This year’s event held under the theme “Solidarity and Coordination for Common Development, has attracted over 1,400 companies from 54 countries and regions, with Sri Lanka as the Guest of Honour country and Thailand as the special partner nation.
China-Sri Lanka bilateral trade reached a record high of USD 5.36 billion in 2024, representing a 13.4% year-on-year increase. This makes Sri Lanka China’s fastest-growing trade partner in South Asia.
The Sri Lankan pavilion was officially declared open by Sri Lanka’s Minister of Trade and Commerce – Wasantha Samarasinghe and Deputy Minister of Foreign Affairs and Foreign Employment – Arun Hemachandra, who jointly led the country’s high-level delegation to the prestigious regional event.
CGTN’s Ms. Li Qiuyuan spoke with Mr. Kusal Perera, a political analyst and writer for ‘Sri Lanka Mirror’, about his expectations for the expo.
Speaking, Mr. Perera said that Sri Lanka needs to see how the ‘export basket’ can be diversified from the traditional export goods such as tea, in order to make the most of this platform to boost bilateral trade and engagement with China.
When asked which emerging areas such as energy transformation, digital economy and low carbon development seem to be the most promising for the island nation, Mr. Perera highlighted the importance of a combination of energy, technology and environment. “But in the process, we also have to have our national economy planned to accommodate all that,” he emphasised, adding that it will be a long process for Sri Lanka.
He further commented : “I see China opening up instead of getting into protectionism like Europe. It’s basically the second largest economy in the world… still expanding… still improving… still developing…”
China’s economic openness for all South Asian countries is a huge opportunity in a global economy that now retreats with regulated and protected markets. Protectionism would not be a catalyst for economic growth. We in South Asia have to be open too. China is already open and its economy is growing on global trade. It’s their openness that has taken them everywhere” he adds.
Deputy Minister of Public Security and Parliamentary Affairs – Attorney-at-Law Sunil Watagala has informed Parliament that a renewed investigation is underway into a fraudulent bank account allegedly maintained by Shiranthi Rajapaksa, wife of former President Mahinda Rajapaksa.
He stated that a fake account titled ‘Siriliya Saviya’ had been opened in her name and that the mandate form related to the ‘Siriliya’ Organization’s bank accounts had been fraudulently removed from the bank.
The Minister further revealed :
The account, now suspended, was opened on November 14, 2006, at the People’s Bank, Suduwella Branch, Darley Road, Colombo 10, under account number 143/1/001/4/6235069. Shiranthi Rajapaksa is listed as the chairperson of the account, with Kalyani Dissanayake as secretary and Nirosha Jeevani as treasurer.
The account currently holds a balance of Rs.43 million. Records indicate that Rs. 82,900,088 had been deposited on 88 occasions, while Rs.39,015,656 had been withdrawn on 129 occasions. Additionally, a fixed deposit of Rs.10 million had been opened under the name ‘Siriliya’.
The Financial Crimes Investigation Division (FCID) has resumed investigations into the matter.
Deputy Minister also mentioned several other questionable financial transactions involving the Rajapaksa family, such as ;
Rs.152 million allegedly obtained by CSN (Carlton Sports Network) from the Treasury.
Rs.35 million obtained by Gotabaya Rajapaksa from the Urban Development Authority to build a memorial for his parents.
Rs.208 million used by Basil Rajapaksa to purchase a house in Malwana.
