Food & Climate
The Iran-Israel war threatens food security in Sri Lanka, as it will negatively impact the country’s exports and imports and may sharply reduce remittances from workers abroad, according to an economic expert in an article.
Nearly six years ago, Sri Lanka declared bankruptcy after defaulting on $46 billion in debt. Its foreign exchange reserves were so depleted that the country was unable to import basic food items.
The government entered into an agreement with the International Monetary Fund, imposing a harsh austerity policy that placed enormous pressure on its citizens.
Nimal Sanderatne, Imperatives for Economic Development, said: “The cost of the country’s essential imports could rise steeply, merchandise exports could fall drastically, inward remittances from West Asian countries could decrease substantially and earnings from tourism from Western countries in particular could be adversely affected if the conflict between Israel and Iran escalates”.
Food security in Sri Lanka could be adversely affected by the higher costs and disruptions in shipping as the country imports a large variety of essential foods. The higher import prices of food would be a strain on the trade balance and the balance of payments, according to the article that seen by “Food & Climate” platform.
The Iran-Israel war entered a new phase on Sunday, June 22, 2025, as the United States participated in launching strikes against nuclear sites in Tehran.
Sri Lanka’s tea exports
Sri Lanka’s exports, which are already facing severe threats owing to US tariffs, could be adversely affected by higher transport costs and shipping difficulties as well due to the Iran-Israel war, according to Nimal Sanderatne, Imperatives for Economic Development.
He said: “Tea exports to West Asia, which constitutes a large proportion of our tea exports, could be adversely affected by the unsettled conditions in the region. However, tea is such a basic need of West Asian countries that it is difficult to imagine a reduced consumption of the beverage.
Ensuring tea shipments to West Asia would be in the mutual interest of tea-consuming West Asian countries and Sri Lanka’s economy.
Sri Lanka earned 1.43 billion U.S. dollars from tea exports in 2024, with an increase of more than 9% year-on-year, state media reported in Jan.
Sri Lanka exported 245.79 million kilos of tea in 2024, up from 241.91 million kilos in 2023, state media reported, adding that on average, the country earned 5.84 dollars per kilo of tea exported in 2024.
Tea is one of Sri Lanka’s main foreign revenue generators. According to local reports, Iraq was the top importer of Sri Lankan tea, followed by Russia and the United Arab Emirates, according to Xinhua.
Food security in Sri Lanka faces further threats
Nimal Sanderatne, Imperatives for Economic Development continued to review the reasons for the potential impact of the Iran-Israel war on food security in Sri Lanka, stating that the decline in remittances from workers abroad is one of the most significant factors.
He said: “The most serious impact of the current West Asian conflict could be its impact on inward remittances—the strength of our external finances. About one half of our remittances comes from West Asian countries. A drastic reduction of these owing to our West Asian workers returning could erode our external finances significantly”.
And the solution, that We have to explore ways of finding other countries to send our workers to enhance our remittances.
The threat to inward remittances could be reduced by workers seeking employment in countries such as South Korea, Malaysia, Hong Kong, Singapore, Australia, New Zealand and Britain. Acquiring the needed skills and language fluency are prerequisites for such employment.
Tourism, the other main strength in our external finances, too, is likely to be affected adversely.
Safety concerns and higher costs of air travel are likely to discourage tourists from Western countries. Fortuitously, most tourists are from India and China. Tourists from these Asian countries are likely to increase owing to the insecurity of travel to Western countries and higher airfares.
The spread of chikungunya and other infectious diseases is another threat to our tourism. This could be an intractable problem. There is an expectation that the currently prevalent diseases would diminish by September this year.
The current war between Israel and Iran has reached a height where there is an imminent danger of a nuclear explosion. This would be a severe threat to the entire world and needs to be contained by strong international actions.
A ceasefire would be of immense benefit to the Sri Lankan economy, which could be seriously hampered by an expansion of the war. However, it would be prudent to take measures that would erode the external finances as well as threaten the food security in Sri Lankan, according to “The Sunday times”.
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