We have confirmed reports from buyers that because US Government freeze on Iranian assets in the US, they will not settle their bills particularly tea buying bills owing to Sri Lanka and India.
These sources said although alarming repercussions were absent at this week’s sale, particularly because of Christmas holidays; sales in January would not auger well for the Tea market here.
Non-settlement of bills will also affect all goods and services involving Iran’s custom; from other supply locations as well.
Iran buys about 70 million kilos tea each year from Sri Lanka. Approximately 22 percent crop. Quantum bulk Tea exports if not purchased will affect market conditions.
Expectations are that inter-government moves are now under way to defuse an other wise volatile situation directly affecting Colombo Tea Auctions. Results will be serious, and according to Tea Traders will have drastic drop down effects on the entire industry.
It would be interesting to see what the Tea Board would do to counter desultory positions such as this.
Colombo auctions since 2006 have seen steady increases in sales averages converging on 2009.
The former period 2006, price average was Rs199.58 per kilo. However 2009 to date averages increased to Rs384 per kilo.
Substantial increases such as that indicated here have never been experienced by the tea industry in Sri Lanka previously.
source - www.island.lk
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