Tea exporters say erratic telecom connectivity and widespread business disruptions due to the conflict are making it difficult to reach out to their Iranian clients. This has impacted Rs 100-150 crore worth of premium orthodox tea shipments, for which contracts have already been signed.
“It has been one week since the war began. The shipments for the past week are on hold as we are not able to establish contact with our buyers,” said Mohit Agarwal, director, Asian Tea Company. “This is the time for Iran to buy premium second flush teas. We have no other choice but to wait and watch.”
“Offices are closed in Iran, and therefore, the exporters are not able to contact the Iranian buyers. Connectivity has become a major issue in Iran due to the war situation,” Agarwal added.
The overall West Asian market, including Iran, Iraq, Qatar, Saudi Arabia and UAE, consumes around 90 million kg of Indian tea, comprising about 35% of total tea exports.
The price of Assam orthodox tea hit a record high of Rs 314 per kg at auctions this year, buoyed by strong demand from Gulf countries. Prices were Rs 15-20 per kg lower last year.Orthodox tea prices have fallen by 5-10% in the past week due to suspension of shipments to Iran while other Middle East countries did not place fresh orders due to geopolitical tensions caused by the Iran-Israel conflict. Anish Bhansali, partner of Bhansali & Company, a tea exporting firm, said, “Exports to Iran have come to a standstill and prices may fall further. Moreover, uncertainty looms over exports to Iraq, UAE, Saudi Arabia and Qatar as these shipments pass through the Strait of Hormuz, which Iran is controlling.”
As Israel and Iran continue to launch missile and drone attacks on each other, there is growing concern that Iran could restrict or block access to the Strait of Hormuz—something it has threatened in the past. Even the fear of this happening can send shockwaves through oil markets and disrupt global trade.
South India Tea Exporters Association chairman Dipak Shah said exporters are taking a cautious stance since freight costs and insurance expenses for shipments are likely to increase if the Iran-Israel conflict prolongs for a long time.
Iran predominantly buys orthodox tea from north India, though it also buys limited quantities from south India. “There is apprehension among exporters about how the situation will pan out in the next few days. Nobody wants to venture into a country engaged in a military conflict,” Shah said.
The conflict comes at a time when the premium second flush teas have started arriving in the market. The second flush tea is the largest foreign exchange earner for the Indian tea industry.
India exported about 255 million kg of tea worth Rs 7,111 crore in 2024, when it moved up to the third position from the fourth on tea exports, replacing Sri Lanka. Exports from Assam and West Bengal totalled 154.81 million kg, valued at Rs 4,833 crore. South India’s share was 99.86 million kg worth Rs 2,278 crore.
Content Source: economictimes.indiatimes.com