COLOMBO, June 23 (Reuters) - Sri Lanka is set to start bartering tea to Iran next month in lieu of $250 million owed for oil, a Sri Lankan official told Reuters on Friday, as the crisis-hit country tries to lift sales to a key market and protect its forex reserves.
"This is very timely for us because we get access to an important market and both Iran and Sri Lanka can trade without relying on dollars," Sri Lanka's Tea Board Chairman Niraj de Mel told Reuters.
"The agreement was to send $5 million worth of tea each month for 48 months but we plan to start with about $2 million per month."
Globally popular Ceylon Tea is Sri Lanka's highest foreign exchange-earning crop, brewing $1.25 billion for the cash-strapped country last year, according to government data.
Iran has been one of Sri Lanka's main tea buyers but exports have fallen steadily from $128 million in 2018 to $70 million last year as U.S. sanctions on Iran hit trade.
Persons:
Niraj de Mel, riyals, de Mel, Uditha, Krishna N, Das, Peter Graff
Organizations:
Sri, Reuters, Tea, United Arab Emirates, Ceylon Petroleum Corp, Tea Board, National Iranian Oil Company, International Monetary Fund, Thomson
Locations:
COLOMBO, Sri Lanka, Iran, Ceylon, Sri Lanka's, Lanka's, UAE, Lankan