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Sri Lanka to pay off country's £190m oil debt with supplies of TEA

Sri Lankan officials plot to pay off country’s £190m oil debt with supplies of TEA

  • Plantations minister Remash Pathirana said he would send Ceylon tea to Tehran
  • He said Sri Lanka would send £3.8million worth of tea each month to settle debt
  • At that rate, the £190million oil debt with Iran would take over four years to repay
  • There was no word from Tehran as to whether the deal was acceptable

Sri Lanka plans to settle a £190million oil debt with Iran in tea leaves.

Plantations minister Ramesh Pathirana said he aimed to start sending Ceylon tea to Tehran from next month.

‘We hope to send $5million (£3.8million) worth of tea each month to repay Iran for oil purchases pending since the last four years,’ he said.

At that rate, the debt would take more than four years to repay.

Sri Lanka plans to settle a £190million oil debt with Iran by sending Tehran tea leaves every month for the next four years. Pictured, tea workers pluck tea in Nuwara Eliya, Sri Lanka

The scheme is expected to save Sri Lanka much-needed foreign currency.

There was no word from Tehran as to whether the deal was acceptable.

It came after Sri Lanka’s inflation hit a record 11.1 per cent last month, as authorities warned a worsening economic crisis could prompt further food rationing.

The island’s tourism-dependent economy was hammered by the pandemic and the government imposed a broad import ban to shore up foreign exchange reserves, triggering shortages of essential goods.

Supermarkets have for months been rationing milk powder, sugar, lentils and other essentials as commercial banks ran out of dollars to pay for imports.

Plantations minister Ramesh Pathirana (pictured) said he aimed to start sending Ceylon tea to Tehran from next month

On Wednesday official data showed prices soaring at their fastest rate since the National Consumer Price Index (NCPI) was launched in 2015, with food prices up 17 percent from a year ago.

Authorities may have to impose further food rations and seek foreign aid to help feed the most needy, agriculture ministry secretary Udith Jayasinghe told reporters.

‘We may have to borrow grains such as corn from friendly countries and think of rationing food so that mothers and the sick can be fed,’ he said.

‘Others may have to make sacrifices.’

But within hours Jayasinghe was replaced by another official, President Gotabaya Rajapaksa’s office announced, without saying why he was sacked.

Food shortages have been worsened by the government’s ban on agrochemical imports, which was lifted last month after widespread crop failures and intense farmer protests. 

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