Amid tensions in West Asia, India has managed to raise tea exports to Iran, doubling its shipment volume to 17.7 million kg between April and July 2019, from a year earlier.
This has happened when overall tea exports have remained flat at 73.2 million kg between April and July 2019 against 73.4 million kg between April and July 2018, with exports changing marginally to most destinations.
Unit prices of Indian teas, too, rose to ₹282.9 against ₹197.6 and $4.1 against $3.5 for the period under review.
Tea exports were valued at ₹1,676.7 crore against ₹1,491.2 crore with improved prices. Tea Board of India deputy chairman Arun Kumar Ray said export prices rose on the back of improved tea quality, which came after last year’s curtailment of production during the winter months. “This and increased exports of orthodox teas led to the improved show at Iran,” he said.
Over the years, several measures have been taken to woo the over 100 million kg Iranian tea market. While Iran grows sizeable volume of tea, it also imports from many countries, including Sri Lanka and India, to meet its requirements and for blending.
In recent times, the Commerce Ministry and tea industry have jointly taken several initiatives, including participating in buyer-seller meets in Tehran to expand the network. India also has seller-meets with visits to tea estates to build trust on issues such as good manufacturing practices (GMP). Issues such as online viewing of phytosanitary certificates have also been addressed.
“These [initiatives] have led to increased exports,” said Sujit Patra, secretary, Indian Tea Association.
Merchant exporters are wary about raising a toast to Iran exports. Their concerns arise out of the existing rupee-rial export mechanism pursued for exports to Iran, and stem from the U.S. economic sanctions on Iran and its restrictions on dollar trade with the country. In 2019, methods like advance payment and forward contracts were made to ease exports of certain commodities, including tea.
Reserves built up through prior oil imports were converted to rupee to help exports. These reserves were now running out and if tensions continued, they would cast a shadow on India’s most promising orthodox export market by next year, merchant exporters said.
