Tea planters in India reported that they have started receiving purchase enquiries from Iran. This recent development could potentially reverse the slowdown. There was a drop last year in the shipments to the West Asian nation due to uncertainty over US oil sanctions. As the US administration late last year decided to exempt India from Iran oil sanctions.
Tea planters said that they are receiving queries related to tea trade from Iranian buyers. They are interested to buy first flush teas, which enter the market in the April-May period. Iran normally buys second flush orthodox tea from India. If the Iranian buyers will buy tea from India then this could increase the competition with Sri Lanka, because as of now Sri Lanka is a major exporter of orthodox teas to Iran.
Vivek Goenka, chairman of Indian Tea Association said, “The rupee-rial trade between India and Iran will help Indian tea exporters. In fact, Iranian buyers are very keen to purchase Indian orthodox teas and they may even buy the first flush teas from India.”
As per the US sanctions on Iran, it will be difficult for Sri Lanka to trade with the West Asian nation as their business is conducted in dollars.
Iran has its own tea plantations and as well as it also imports tea from nations like India, Sri Lanka and Kenya. The tea consumption in Iran is about 5 per cent of the total world tea production.
Azam Monem, director of tea company Mcleod Russel India, said, “It is expected that the renewed interest of Iran to buy more orthodox teas from India will make the Indian planters shift a portion of their CTC production to orthodox teas.”
Orthodox teas are whole leaf teas manufactured using a traditional process. India produces 80-100 million kg of orthodox teas every year.
Monem also added, “We could have easily crossed 30 million kg in 2018 had there been no confusion over the US sanctions on Iran.”