Iran-Israel conflict puts Assam’s orthodox tea exports at risk, says expert

Jorhat, June 24: At a time Assam’s tea industry continues to garner global recognition, the ongoing conflict between Iran and Israel is set to significantly impact the state's orthodox tea exports, especially to Iran, one of its largest consumers.

Prabhat Bezbaruah, former chairman of the Indian Tea Board and a prominent tea farmer, painted a grim picture in the wake of the escalating tension in the Middle East.

“Assam produces around 85 million kilograms of orthodox tea annually, most of which comes from large tea gardens, while only a small percentage is produced by bought-leaf factories. Out of this, nearly 25 million kilograms—about 30%—is exported to Iran. With the present situation in the Middle East, this market is now at serious risk,” Bezbaruah explained.

Assam exports 140 million kilograms of tea globally, which constitutes more than half of India’s total export of 260 million kilograms. If the Iran market becomes inaccessible, Assam stands to lose approximately 25% of its export volume, he argued.

“This will lead to a price crash, which has already begun. The price of orthodox tea, which had gone up to Rs 50–60 per kg, has already fallen by Rs 100 per kg in the market. This steep decline is unsustainable,” Bezbaruah warned.

Bezbaruah stressed on the quality and prestige of Assam's orthodox tea, saying, “Assam orthodox tea has unmatched richness in liquor and flavor. Other countries simply cannot compete with it. It has carved out a prestigious position in the global market.”

He also pointed to the struggling CTC tea segment, which has seen a significant decline in both quality and demand. “The global market for CTC tea has shrunk. Earlier, many gardens produced CTC, but now only a handful remain,” he added.

The challenges do not end with geopolitics. Assam’s tea industry is also reeling under the impact of climate change, said Bezbaruah.

Bezbaruah warned, “The ideal temperature for tea production is 35°C. In recent years, we are experiencing 38°C in June, and erratic rainfall patterns are further disrupting the crop cycle. A few days of heavy rain followed by a long dry spell can significantly reduce output.”

Moreover, the industry's economics are becoming increasingly strained. "The operational costs of tea gardens remain unchanged while prices are falling. Wages for workers haven't increased for over a year, but an increment is due. If prices continue to decline, sustaining operations will become more difficult,” he said.

Bezbaruah also raised concerns about bought-leaf factories sourcing raw tea leaves from Arunachal Pradesh at lower prices, affecting quality standards.

“The leaves from Arunachal are rough and lack the finesse required for high-quality orthodox tea. This affects the overall market for Assam tea,” he said.

Despite these mounting concerns, he acknowledged the state government’s efforts in infrastructure development, including road construction and worker housing in tea estates. However, he stressed that the core problem remains unresolved - lack of demand and oversupply are driving prices down.

With Assam producing over 700 million kilograms of tea, of which 140 million are exported, any disruption in key markets like Iran-Israel war can have cascading effects on the state’s economy and the livelihoods of thousands dependent on tea cultivation and trade.