New Delhi, Feb 7 (KNN) Iran, a major importer of tea from India, has seen a significant drop in its tea imports, plunging by approximately 62 per cent in the first ten months of the Iranian calendar year (March 21, 2023 - January 20, 2024).

This decline, as reported by the Iran Customs Administration, is expected to have far-reaching consequences for Indian tea exporters.

With India being a primary tea supplier to Iran, constituting nearly 21 per cent of its total tea exports, the sharp decline in Iran's tea intake has left Indian exporters in a precarious situation.

The decrease in shipments is attributed to payment crises, leaving exporters grappling with surplus stocks of orthodox tea grades preferred by Iran but not as popular in the domestic Indian market.

Dipak Shah, Chairman of the South India Tea Exporters Association, highlighted the challenges faced by exporters and noted that while exports to other destinations like Iraq, Tunisia, and Russia remain steady, issues such as pesticide concerns have hampered exports to Europe.

Additionally, uncertainties in conflict zones like the Middle East and Ukraine add to the challenges.

Despite these obstacles, orthodox teas are fetching better prices in the export market compared to CTC grades.

Orthodox teas are priced between Rs 150-200, whereas CTC grades range from Rs 90-95.

C. Sreedharan, President of the United Planters' Association of Southern India (UPASI), stressed the importance of increased engagement between the Indian government and foreign counterparts to facilitate smoother trade pathways and enhance market access.

He suggested incorporating trade concerns into governmental dialogues with key export destinations like Iran and Saudi Arabia to explore new market opportunities.

Notably, Indian tea exports during January to October 2023 totaled 3.06 million kg, reflecting a decline of 182.69 million kg primarily due to reduced intake from key markets such as Iran, the Russian Federation, and the UAE.

However, there were improvements in exports to countries like Iraq and Turkey.

Despite challenges, South Indian exports saw a marginal increase of 2.2 million kg during the same period.

However, the region's share in India's total production and exports has declined from 50 per cent to 36 per cent.

In response to market dynamics, tea manufacturers are increasingly focusing on exports due to higher prices abroad, which offset the higher shipment costs.

This strategic shift underscores the attractiveness of exports amid challenging domestic and international conditions.

(KNN Bureau)