Fall in export to Iran brews trouble for Indian tea producers

The drop in Iran’s tea imports by around 62per cent is likely to have a major impact on the shipments from India, which is the major supplier to the Islamic Republic.

• Also read:India’s tea export likely to be down by 10% this year

Iran Customs Administration report says that the value of Iran’s tea imports in the first 10 months of the Iranian calendar year (March 21, 2023-Jan 20, 2024) declined 62 per cent compared to the same period last year.

Iran’s market constitutes nearly 21 per cent of the total tea exports from India and the decline in off-take reportedly due to the payment crisis has put Indian exporters in a precarious situation.

Dipak Shah, Chairman, South India Tea Exporters Association said the decline in shipments resulted in exporters holding stocks of certain grades of orthodox tea grades preferred by Iran and are not consumed in the Indian domestic market. At the same time, exports to other overseas destinations are doing well like countries such as Iraq, Tunisia, Russia etc.

However, the issues with regard to pesticides have brought down the volume of exports to Europe. Generally, the overall situation, especially in the war zone of the Middle East and Ukraine is quite fluid and does not look promising, he said.

Orthodox teas are fetching better prices in the range of ₹150-200 in the export market, while that of CTC grades are ruling at ₹90-95.

C.Sreedharan, Upasi President emphasised the need for increased engagement between the Indian government and foreign counterparts for smoothing the trade pathways and boosting market access. He suggested integrating trade concerns in government level dialogues with key export destinations like Iran and Saudi Arabia and other destinations to open new market opportunities.

The Indian tea exports during Jan-Oct 2023 was 3.06 million kg, lower at 182.69 million kg mainly on account of lower intake by some important destinations such as Iran, which reported lower imports by (-) 15.7 million kg, Russian Federation (-) 5.51 million kg and UAE (-)4.5 million kg. However, there were noticeable improvements in exports to Iraq at 16.8 million kg and Turkey at 4.27 million kg.

South Indian exports during 2023 [Jan-Oct] was marginally higher by 2.2 million kg during the current period. However, for the region which used to export nearly 50 per cent of India’s production and 50 per cent of the total Indian exports, had declined now to 36 per cent.

• Also read:Red Sea crisis: Indian tea exporters to Europe and US stare at massive losses

A senior plantation company official said that tea manufacturers are now focusing on exports as it turned out to be a viable strategy due to increased prices despite higher shipment costs. The financial gains from selling at higher prices abroad outweigh the logistical expenses, making exports an appealing option.

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