TEHRAN (Iran News) – Ambassador of Iran to Sri Lanka Mr. Hashem Ashjaazadeh rejected the reports that Sri Lanka sends low quality tea to Iran in exchange for its dues, reiterating that talks are underway for exporting oil to Sri Lanka
Speaking to ILNA, Ashjaazadeh rejected the reports that Sri Lanka barters second and third class tea for oil with Iran, adding that the two countries have signed an MoU wherein the mechanism of payment has been changed and now traders of the two countries reach an agreement and then instead of money transfer from Iran to Sri Lanka, the money is paid to Sri Lankan trade partners via Sri Lankan’s debts to Iran. He noted of course those traders who are currently active in Sri Lanka are noble traders who try to import good quality tea from Sri Lanka and if low quality tea is imported, it is not because of the MoU and the agreement and it is because of the trader.
Touching upon the recent MoU between Colombo and Tehran regarding mechanism for payment of Sri Lanka’s debts to Iran, the diplomat said that it is not correct to use the term of “barter” for this agreement and MoU, and it is not in fact any barter and it is only a mechanism for return of Iran’s prolonged debts.
Ashjaazadeh added that in fact in the MoU which has been signed for Iran’s nine-year-old debts which is estimated around $215m, tea is an essential commodity as it once used to be exported to Iran even before this agreement, and it has been taken into consideration in the agreement and therefore by monthly import of tea worth of around $5m, the prolonged debts of Sri Lanka to Iran will be settled.
He added that of course Iran is willing to get its money through the common banking systems but due to some reasons it is impossible and therefore choosing tea in Sri Lanka as a commodity for barter in exchange of money is quite logical because Sri Lanka is one of the best tea producing countries and currently considerable amount of tea is imported into Iran from Sri Lanka which is welcomed by Iranian consumers.
The ambassador reiterated that in the MoU it has been stipulated that in case sanctions are removed, the agreement will be halted and money plus its interests will be paid via common banking systems. He stipulated that the MoU is currently about for payment of Sri Lanka’s debts to Iran and currently Iran does not intend to expand it to other things.
Ashjaazadeh noted that this MoU was mostly welcomed in the Sri Lankan media because Sri Lanka is currently grappling with the debts and financial problems. He also rejected that this agreement and export of tea from Sri Lanka will be a blow to Iranian tea planters and said according to the statistics, Iran produces annually 30,000 tons at its best and some of this volume is also exported while Iran needs between 100,000 to 120,000 tons of tea annually, and it means the country at least needs importing some 80,000 tons of tea annually to meet its demands. He said therefore import of tea is no new issue because 80 percent of the domestic demands are imported and Sri Lanka is one of the best tea producing countries in the world.
The diplomat went on to say that Sri Lankans seek importing oil and fuel from Iran and the talks are underway as a couple of months ago Sri Lankan energy minister had a visit to Tehran, adding that the mechanism for payment for the oil sale is the main hurdle for oil export to Sri Lanka and recent MoU may resolve the problem.