A decline in exports to Iran is causing problems for Indian tea producers.

The roughly 62 percent drop in Iranian tea imports is likely to have a major impact on shipments from India, the Islamic Republic’s largest supplier. According to a report by the Iranian Customs Administration, the value of Iran’s tea imports during the first 10 months of the Iranian calendar year (March 21, 2023 to January 20, 2024) decreased by 62 percent compared to the same period last time. a year . The Iranian market accounts for nearly 21 percent of India’s total tea exports, and a drop in sales due to the payment crisis has put Indian exporters in a precarious position.

Dipak Shah, president of the South Indian Tea Exporters Association, said the drop in shipments has resulted in exporters stockpiling some orthodox tea varieties favored by Iran that are not consumed in India’s domestic market. At the same time, export to other foreign countries such as Iraq, Tunisia, Russia etc. However, pesticide problems reduced exports to Europe. In general, the situation, especially in the war zone of the Middle East and Ukraine, is quite volatile and, according to him, does not look promising. Orthodox teas are cheaper in the export market at ₹ 150-200, while CTC teas are priced at ₹ 90-95.

C.Sreedharan, Chairman of Upasi emphasized the need for increased engagement between the Government of India and foreign parties to smooth trade routes and promote market access. He suggested that trade issues should be included in government-level dialogues with major export destinations such as Iran and Saudi Arabia, as well as other destinations, to open up new market opportunities.

India’s tea exports were 3.06 million kilograms or 182.69 million kilograms in January-October 2023, mainly driven by some important destinations such as Iran, which reported a decrease in imports by (-) 15.7 million kilograms, the Russian Federation (-) 5.51 million kg and the United Arab Emirates (-) 4.5 million kg. However, exports to Iraq (16.8 million kilograms) and Turkey (4.27 million kilograms) increased significantly. South India’s exports in 2023 [Jan-Oct] were marginally higher by 2.2 million kg over the current period. In contrast, the region, which earlier accounted for nearly 50 percent of India’s output and 50 percent of India’s total exports, has now declined to 36 percent. A senior official of a plantation company said that tea producers are now focusing on exports as it has proved to be a profitable strategy as prices have risen despite higher supply costs. The financial benefits of more expensive foreign sales are greater than the logistics costs, which makes exporting attractive.

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