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Sri Lanka hopeful of starting tea-for-oil barter with Iran in July

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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.

Source: Reuters

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SC judgement on petitions challenging IGP’s appointment, on July 24

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The Supreme Court is to pronounce judgement on the petitions, challenging the appointment of Inspector General of Police Deshabandu Tennakoon, on July 24.

The petitions were filed by 08 parties including His Eminence Malcolm Cardinal Ranjith.

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Lawyers helped Kanjipani Imran & Ganemulle Sanjeeva to escape from SL – Tiran

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Kanjipani Imran and Ganemulle Sanjeeva, who are wanted by the police, were helped by their lawyers to escape from the country, Minister of Public Security – Tiran Alles has said.

He has said this during a media briefing held in Colombo today (July 18). 

The minister also stated that the police has seized drugs amounting to Rs. 19 billion as well as 955 firearms, since the ‘Yukthiya’ operation kicked off on Dec. 17, 2023.

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“Japan ready to resume suspended official development assistance projects”

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Dr. IZUMI Hiroto, the head of the Japanese delegation visiting Sri Lanka, lauded the successful completion of the country’s debt restructuring process, noting that it has paved the way for the resumption of Japanese Official Development Assistance (ODA) projects. 

These projects, which include several initiatives that were suspended last period, are now poised to restart, signaling a renewed phase of cooperation and development.

Dr. Hiroto highlighted that the international community’s confidence in President Ranil Wickremesinghe’s leadership is strongly reflected in the expedited success of the debt restructuring agreements. This achievement, accomplished in partnership with the Official Creditors’ Committee and the International Monetary Fund, underscores a remarkable turnaround for Sri Lanka.The high-level Japanese delegation, comprising representatives from the housing, construction, and urban sectors, met with President Ranil Wickremesinghe at the Presidential Secretariat this morning (18).

During the meeting, Dr. IZUMI Hiroto highlighted the successful completion of Sri Lanka’s debt restructuring process and announced that projects under Japanese Official Development Assistance (ODA), including those previously suspended, are set to resume.

The discussion also focused on new investment opportunities in Sri Lanka, emphasizing the potential for enhanced cooperation between the two nations. The delegation expressed their appreciation for Sri Lanka’s economic progress and the swift achievement of debt restructuring agreements in collaboration with the Official Creditors’ Committee and the International Monetary Fund. They praised President Wickremesinghe’s leadership in navigating the country through its financial challenges, which has restored international confidence and paved the way for renewed development initiatives.

President Ranil Wickremesinghe, recalling Japan’s invaluable support during Sri Lanka’s debt restructuring process, emphasized Sri Lanka’s commitment to deepening economic cooperation with Japan across various sectors, including education and agricultural modernization. The President stressed the importance of resuming stalled projects under Japanese cooperation to further strengthen bilateral relations.

Additionally, President Wickremesinghe highlighted the critical role of the Colombo Dockyard, underscoring its significance as a key institution in Sri Lankaís maritime and industrial landscape.

The Japanese delegation noted that several projects that are currently suspended, including the Bandaranaike International Airport (BIA) Development Project, the Colombo Port Eastern Terminal Development Project, the Central Expressway Construction and the Digital Broadcasting Project, can be promptly restarted.

Additionally, the delegation highlighted the potential to resume the Light Railway Transit (LRT), which was halted by the previous government. They are actively assessing locations to re-implement this project, recognizing its significant potential to alleviate traffic congestion in Colombo city.

Both sides emphasized the significance of Public-Private Partnerships (PPP) in executing housing for low-income earners and other urban development projects. It was also highlighted that the Government of Sri Lanka is committed to promoting environmentally friendly projects and renewable energy in line with its policies and international agreements.

The Japanese delegation expressed their willingness to the President to recruit Sri Lankan graduates in the field of technology for job opportunities in Japan’s private sector. This initiative aims to improve the electricity supply sector in Japan. The delegation also highlighted the Joint Credit Mechanism (JCM), which encompasses projects designed to promote environmental sustainability by utilizing advanced Japanese technology to reduce carbon dioxide emissions.Chief of Presidential Staff and Senior Advisor to the President on National Security Sagala Ratnayaka, Japanese Ambassador to Sri Lanka H.E. Mizukoshi Hideaki, Chairman of the Board – Japan Bank for International Cooperation (JBIC) Mr. MAEDA Tadashi, Presidential Senior Advisor to the President on Economic Affairs Dr. R. H. S. Samaratunga, and the Managing Director/CEO of the Colombo Dockyard PLC Mr. Thimira S. Godakumbura, along with representatives from several leading businesses in Japan attended the discussion.

President’s Media Division (PMD)
18.07.2024

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