Crisis Brews For Premium Orthodox Assam Tea As Israel-Iran Conflict Hits Exports

News18

16 hours ago

Last Updated:
Iran is a key destination for Assam's orthodox tea, accounting for nearly 25 million kilograms—approximately 30%—of the state's annual orthodox tea production of 85 million kgs
At a time when Assam's tea industry continues to garner global recognition, the ongoing geopolitical conflict between Iran and Israel has emerged as a potential disruptor, casting a shadow over the state's vital orthodox tea exports—particularly to Iran, one of its largest and most loyal markets.
Market Under Threat
Iran is a key destination for Assam's orthodox tea, accounting for nearly 25 million kilograms—approximately 30 per cent—of the state's annual orthodox tea production of 85 million kilograms. This figure is particularly significant, considering that Assam exports around 140 million kilograms of tea globally, over half of India's total export of 260 million kilograms.
However, in the wake of the Iran-Israel conflict, this critical export channel has entered uncertain waters. According to Prabhat Bezbaruah, former chairman of the Indian Tea Board and a leading voice in the industry: 'With the present situation in the Middle East, this market is now at serious risk."
In 2024, India exported 35 million kg tea to Iran, whereas the export quantity to Iraq was 40.47 million kg. The export in Kolkata auction slipped by 59 per cent, while in the same time, the export at the Guwahati Tea Auction centre came down by 41 per cent. Prices of orthodox tea to Iran at Kolkata Auction was 307.34 kilogram and at Guwahati was 269.53 rupees per kilogram. Post-war, the prices came down by 24 per cent at the Guwahati auction itself.
'It's premature to predict. The export to Iran is a process which involves the government. The registration works needs to be done and then comes the payment process. Registration is time-bound and there is a huge amount as outstanding payment now. The ships have been docked for the past one week," said Anshuman Kanoria, president, All India Tea Exporters Association.
Unlike other destinations, tea exports to Iran operate under a government-controlled system that includes time-bound registration of contracts followed by delayed payment schedules. While the tea for this season has already been shipped or is awaiting dispatch within a week, delays are expected. Outstanding payments remain a concern for exporters, increasing the financial burden on producers.
Current orders are still in hand, and while shipments have not come to a complete halt, uncertainty is looming large over future contracts.
The silver lining in the crisis is that demand from Iran remains strong, and outlook for future orders is positive—if political stability returns soon. However, with ongoing instability, exporters are wary of risks. Prices have already taken a major hit, falling 10 to 20 per cent across different grades, with premium orthodox teas being the hardest hit.
Bezbaruah warned, 'The price of orthodox tea, which had climbed to Rs 50–60 per kg, has already fallen by Rs 100 in some segments. This kind of decline is unsustainable."
Assam orthodox tea is primarily auctioned at the Kolkata Tea Auction which also deals with orthodox tea from down South.
Impact Beyond Iran
The Middle East war's effect is spilling over into broader markets. Iraq, which has emerged as the major secondary destination for Iran-specific teas these days, is absorbing some of the volumes meant for Iran. However, medium-quality teas have been most affected, with a noticeable dip in sales and product coming back unsold into the domestic market.
'The problem with the Iran-specific orthodox is the mid-range. This tea is impacted as the sale percentage has come down drastically," highlighted Kanoria. However, exporters are cautiously optimistic and willing to take the risk of continued exports—particularly of orthodox Assam and South Indian teas.
Diversifying Through Compliance and Channels
While orthodox teas face geopolitical and financial headwinds, dust teas—used mainly for tea bags—have fetched record prices this season. This is largely due to 100 per cent compliance with EU standards for pesticide and Maximum Residue Limits (MRL), a longstanding issue for many tea-producing regions. The focus on diversified channels and strict compliance is seen as a potential buffer against declining demand in volatile markets.
Climate Change & Economic Pressures
Geopolitics is only one layer of Assam tea's complex crisis. The industry is grappling with climate change, where June temperatures have exceeded 38°C—well beyond the ideal 35°C—and erratic rainfall is disrupting the crop cycle. Also, operational costs remain high, adding to the woes of the industry.
First Published:
June 25, 2025, 15:49 IST
News india Crisis Brews For Premium Orthodox Assam Tea As Israel-Iran Conflict Hits Exports