Tea sector, with govt help, brews diversion of US-led ban on Iran

Tea Board data shows exports to Iran in January-September 2012 was seven mn kg, of total exports of 125.7 mn kg

The tea sector has found a way to again increase exports to Iran, which had fallen sharply after the US embargo on dealings with that country.

The renewed effort appears likely to raise exports multifold; in return, crude oil of an equal worth can be imported from there. Government agencies would ensure tea exporters get rupee payment.

The Indian Tea Association (ITA) recently signed a memorandum of understanding (MoU) with the Iran Tea Association, to take exports to Iran up to 30 million kg in two years. According to top officials of ITA, a delegation recently visited Iran and signed the MoU. India normally exports around 12 million kg to Iran in a year, translating into around six per cent of our tea exports. “Iran is an important destination for our exports and it will increase with this new memorandum,” an ITA official said.

Tea Board data shows exports to Iran in January-September 2012 was seven million kg, of total exports of 125.7 million kg.

“Iran is an orthodox tea market. This will make Indian orthodox production strong. Producers can convert cheap CTC tea to the orthodox variety,” an industry veteran said. India’s production of orthodox or handrolled tea is around 70 million kg, a small portion of the total production of about 1,100 million kg.

India is the fourth largest exporter of tea in the world, after Kenya, China and Sri Lanka. In 2010, total export was 222 million kg, which dropped to 211 million in 2011 and to 195 million kg in 2012. Unlike most other major tea producers, the India tea story is driven by  strong domestic consumption. In fact, in recent years, consumption has been growing at a faster rate than had been estimated. The industry had earlier made a loose estimate of an annual consumption growth of three per cent but now feels this figure would have to be reviewed.