Indian tea farmers and exporters, who had witnessed orthodox tea prices decline amid escalating tensions, are feeling cautious optimism following the ceasefire in the Israel-Iran dispute.
Even as exporters and merchants reevaluate risks and the demand outlook, the prices of orthodox tea, which had fallen following the crisis, are now beginning to rise again.
The average cost of orthodox leaf teas at this week’s Kolkata auctions was Rs 290.66 per kg, up from Rs 269.40 per kg the previous week. Additionally, at the auction conducted on June 24 and 25, 78.55 percent of the teas on offer were sold, compared to 49.26 percent the previous week.
Hemant Bangur, the chairman of the Indian Tea Association (ITA), stated last week that the demand climate was unpredictable.
However, I believe it is now behind us. The exporters have returned to the auctions to cover the amounts they promised Iran and the CIS nations. However, he noted that everyone is definitely wary.
Iran has long been one of the largest markets for Indian tea. The market is estimated to be worth 30 million kilograms (mkg).
The amount of tea exported to Iran in 2022 was 22.21 mkg. In 2023, when Iran ceased to file contracts for Indian tea, this fell to 5.92 mkg. However, the amount of tea exported to Iran rose to 9.24 mkg in 2024.
However, a sizable portion of the market is channeled through the United Arab Emirates, a major hub for re-exporting, so direct export numbers to Iran do not accurately reflect the magnitude of the industry.
Although prices have risen from last week’s lows, they have not yet reached the levels observed before to Israel’s surprise strike on Iran on June 13. However, several growers switched to the CTC variety as a result of last week’s price decline. “The plan was to expand the production of orthodox tea,” stated a major tea manufacturer. However, we are currently earning more CTC. We will create more orthodox if things calm down.
The majority of orthodox tea is exported. Of the 1,284.78 mkg of conventional tea produced in 2024, 118.67 mkg were produced in India; 1,149.21 mkg of CTC were produced.