Calcutta, Dec. 25: Tea exports to Iran have doubled to 16.47 million kg between January and September from about 8.48 million kg during the same period last year.
The near doubling of exports signifies a turnaround in business, which had taken a hit after the payment crisis in the wake of the US sanctions on Tehran. A memorandum of understanding with the Iran Tea Association in March also seems to be paying rich dividends. India and Iran had agreed on an export target of 30 million kg in two years as part of the MoU.
Iran is considered a quality market for high value orthodox and Assam tea. The Assam valley contributes about 550 million kg to the total domestic production of which about 50-60 million kg comprise orthodox tea. These have fetched remunerative prices.
“Iran is a quality market and buys tea from Sri Lanka and India. Trade with India suffered for a while because of the payment crisis in 2011. But the Tea Board helped and several delegations were exchanged,” said Sujit Patra, joint secretary of the Indian Tea Association (ITA).
“The ITA and the Iran Tea Association entered into an MoU in March. As a reciprocal measure, a delegation from Iran came to India in August. Iran exports have jumped up to September. The market is giving us directions that there is good acceptance of Indian tea,” he added.
Meanwhile, producers are focusing more on the orthodox variety. Shifting away from the production of crush, tear, curl (CTC) variety has proved lucrative.
The Tea Board is conducting stringent quality checks on export consignments to ensure standards. Tea councils have been set up for the purpose, one each in north and south India.
“A big change has happened and the situation improved with the rupee trade opening up. Overall, in the first 7-8 months of the year, orthodox tea prices have been 10-15 per cent higher over last year. Bigger demand has come in from Iran,” said Kamal Baheti, wholetime director at McLeod Russel India Ltd.
Iran seems to have made up for the loss suffered in Pakistan. Shipments to the neighbouring country stood at about 12.35 million kg during the period under consideration, a shortfall of 2.66 million kg over last year.
Pakistan buys a good amount of the CTC variety from Kenya, which recorded a bumper crop this year. Moreover, increased attention is being paid on shoring up shipments to the US, the UAE and maintaining momentum in Russia.