West Asia conflict casts shadow on orthodox tea exports to Iran

Kolkata , June 19: The ongoing conflict in West Asia has left tea exporters worried as uncertainty prevailed over shipment prospects to Iran and an early sign of “falling” prices of the orthodox tea variety was noticed, according to stakeholders.

Iran usually imports this variety from India.

They are also apprehensive that exporters may face hurdles in terms of rising freight charges and insurance costs for their shipment to Iran which is in the midst of a military conflict with Israel.

Indian Tea Association Chairman Hemant Bangur said exporters remain cautious in terms of buying orthodox tea as they are not sure about shipments to Iran and might be worried about payments from importers of that country.

“Exporters have exercised a cautious stance to source orthodox tea through the auction route as they are facing uncertainty over shipment volume to Iran and are concerned about payment. This has pulled both the sale percentage and prices of orthodox teas downward,” Bangur said.

The orthodox tea is considered a premium variety and money spinner as it helps planters and traders realise better prices.

“Iran is roughly a 35 million kg market for India and is an important trading partner for us. The conflict between Iran and Israel is a matter of worry. Currently, we are waiting and watching. Exporters are in touch with Iranian importers,” Indian Tea Exporters’ Association Chairman Anshuman Kanoria told PTI.

Due to the uncertainty looming large, exporters remain “conservative in buying tea for Iran”, and this has impacted the sale percentage and prices of the orthodox variety of tea, he said.

“In the last few days, the orthodox tea market in terms of sales and prices has been down by roughly 5-10 per cent, and this is mainly because of the uncertainty arising out of the geopolitical tension between Iran and Israel. Prior to the conflict, orthodox market sentiment was optimistic. However, we are hopeful for an early solution to the conflict,” Kanoria said.

Echoing him, one of the top exporters, Asian Tea Company’s Director Mohit Agarwal said that the sale of the Assam orthodox has stopped since the conflict unfolded and the exporters are anxious.

“Iran is mostly an Assam orthodox market and since the conflict started, the auction sale quantity has dropped and prices of such variety in the auction are down by 5 to 10 per cent. However, it is too early to assess the situation. It is more of a wait-and-watch situation now. If the conflict prolongs, it will cast a shadow on the prospect of tea exports, but we are hoping for a quick resolution,” Agarwal said.

The overall West Asia market, including Iran, Iraq, Qatar, Saudi Arabia and UAE, consumes around 90 million kg of Indian tea, Jhunjhunwala said.

South India Tea Exporters Association Chairman Dipak Shah said exporters are keeping their fingers crossed as freight costs and insurance expenses for shipment are likely to increase if the Iran-Israel conflict lasts for a long time.

--PTI