Iranian tea sanctions
Iran is beginning to feel the effects of renewed economic sanctions imposed by the United States and one of its first problems is adequate tea imports.
Iranians consume more than 120 million kilos of tea each year yet the nation only produces a small percentage of total demand. That means tea drinkers are dependent on imports.
Recent sanctions imposed by the United States, however, make it extremely difficult for other nations to trade with Iran. Such trade could result in punitive action by the United States against those nations as well. India, Sri Lanka, and Kenya – leading exporters of tea to Iran – could become exposed to their own U.S. sanctions, for example, simply by sending tea to Iran.
The sanctions already have forced other economic difficulties inside Iran. Unemployment is up, and the Iranian rial is experiencing record lows on international exchange rates.
Economic sanctions are not new to the people of Iran. The United Nations Security Council adopted a resolution in 2010 expanding long-standing trade restrictions after it was determined Iran continued to develop nuclear weapon capabilities. The United States, under President Barack Obama, strengthened those restrictions in 2012.
After years of negotiation, Iran agreed to restrict its nuclear development in exchange for a relaxation of sanctions. A Joint Comprehensive Plan of Action (JCPOA) took effect in 2014 and most sanctions were lifted. The Trump Administration objected to the deal, however, and withdrew the United States from participation, setting up the current situation.
Iranian officials found ways to circumvent some sanctions prior to JCPOA and may revert to a similar plan this time, according to published reports. India, for example, established a rupee-based trade arrangement in 2012 in which India purchased Iranian oil and paid for it with Indian tea as exports, not cash.
Talks may soon start to see if a similar plan is possible now. Iranian government and trade representatives are expected to meet with Indian counterparts in October to determine if tea can be included in among essential trade items such as rice and pharmaceuticals, according to Azam Monem, chairman of the India Tea Association.
“We have sought a special exchange rate for tea whereby the Iranian buyer can buy tea paying lesser rials,” Monem told the Economic Times.
Iran ranked as the fifth largest tea importer in 2017, receiving nearly 4% of the world’s tea imports. By comparison, the United States ranks third with 6.7% of the year’s imports.