Sri Lanka sees tea BoP gains from Iran nuclear deal...

Anuclear deal between Iran and world powers could lead to more demand for SriLankan tea and ease pressure on the balance of payments as resumption ofIranian oil exports reduce crude prices officials said. This is something we were looking forward to.

Im sure it will help intrading and importing and have a very favourable impact on Sri LankaFinance Minister Ravi Karunanayake said.Wecan expect higher tea prices lower oil prices and benefits will be passed onto manufacturers importers and the consumer.It will help us with balance of payments strengthen the rupee and in reducinginflation further.But Karunanayake told reporters the effects of the deal would only be felttowards the end of the year as it has to be passed by the United StatesCongress.

Iran finally struck a deal with world powers on Tuesday after almost two yearsof talks paving the way for the eventual lifting of sanctions on Iran inexchange for curbs on the Islamic nations nuclear program.Tea industry officials said the lifting of sanctions on Irans banks will makeit easier for Iranian buyers to pay for food imports.

 Were optimistic that the progressive removal of sanctions on Iran will startwith banks so food commodities including tea can move into the country atrade source said. Tea is a food commodity so there is no legal barrier to importing tea intoIran but sanctions on Iranian banks have caused a ripple effect on tea imports thats been the biggest problem he added.

They cant import food because they cant pay for food since banks canttransfer money.But the impact on Sri Lankas crude oil imports is likely to be limited as theCeylon Petroleum Corporation (CPC) refinery is now importing different crudesfrom other origins.

 CPC chairman Ranjith Wickramasinghe said the Iranian nuclear deal will not havemuch of an impact on the 50000 barrelsperday refinery.Our requirements have changed. Weve now shifted to crude from Abu Dhabi.The ban on Iranian oil exports initially badly affected the CPC as itsSapugaskanda refinery on the outskirts of Colombo is optimised to refineIranian crude.