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News18
11 hours ago
- Business
- News18
Crisis Brews For Premium Orthodox Assam Tea As Israel-Iran Conflict Hits Exports
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
India Gazette
11 hours ago
- Business
- India Gazette
Iran-Israel conflict disrupts orthodox tea exports; Assam industry faces major blow
Jorhat (Assam) [India], June 25 (ANI): The ongoing Iran-Israel conflict has severely disrupted India's Orthodox tea exports, particularly disrupting business from Assam, the country's largest producer of Orthodox tea. Iran, a key buyer of Indian Orthodox tea imports nearly 28 million kilos annually, of which around 24 million kilos are sourced from Assam. With Assam producing roughly 85 million kilos of Orthodox tea each year, this disruption has jeopardised a significant portion of the state's exports. Indian Orthodox tea refers to tea processed using the traditional method, which involves hand-plucking, withering, rolling, oxidation, and drying. Exporters report major delays and complications in both shipments and payment settlements since the war began. These disruptions have triggered a steep fall in Orthodox tea prices at recent auctions, causing deep concern among tea growers and manufacturers, especially in Assam. According to observers, what's raising eyebrows within the industry is that Sri Lanka -- another major supplier of Orthodox tea to Iran -- has not seen a similar sharp market decline. Industry experts suggest this may be because Sri Lankan exporters are not exploiting the crisis, or the Sri Lankan government is actively stepping in to stabilise the sector. While the current turmoil is expected to be temporary, the uncertainty is putting immense pressure on Orthodox tea producers. Stakeholders are hopeful that once the conflict subsides, exports will resume and payment channels will normalise. Until then, manufacturers -- particularly in Assam -- are left grappling with mounting losses and market instability. Industry bodies are urging the central government to provide immediate relief and take policy-level steps to support the tea sector during this volatile period. Talking to ANI, Prabhat Bezbaruah, former Chairman of the Tea Board and Toklai Tea Research Institute, said, 'Mainly, Orthodox tea exports have been hit because Iran is a large market for Orthodox teas -- about 28 million kilos of Indian Orthodox tea are exported to Iran.' 'There has been a disruption in shipments as well as in payments. As a result, the prices of Orthodox tea have dropped significantly in the last auction. This is quite surprising because Sri Lanka is also a major exporter of Orthodox tea to Iran, yet the Sri Lankan market has not reacted to the same extent,' he added. He added that there has been a disruption in shipments and payments. 'As a result, the prices of Orthodox tea have dropped significantly in the last auction. This is quite surprising because Sri Lanka is also a major exporter of Orthodox tea to Iran, yet the Sri Lankan market has not reacted to the same extent,' he added. Bezbaruah further added, 'It appears that exporters in India -- who buy tea from tea gardens and tea companies -- are, to some extent, taking advantage of the situation. In contrast, in Sri Lanka, either exporters are not exploiting the situation or the government is intervening to support the exporters and maintain trade continuity.' He expressed his optimism, stating that the present conditions seem to be a temporary issue. 'As soon as the war ends, exports are expected to resume and payments should be regularised. However, at present, we are facing significant difficulties in exporting tea to Iran,' he added. (ANI)
