Middle East Tensions Cast Shadow Over Assam's Orthodox Tea Exports

Amid rising geopolitical tensions in Iran and the broader Middle East region, concerns are mounting within the Indian tea industry, particularly for Assam's orthodox tea segment. In a recent media statement, the Guwahati Tea Auction Buyers Association (GTABA) highlighted the potential impact of the ongoing instability on the export prospects of Indian orthodox tea.

Assam tea, especially orthodox varieties, has been steadily strengthening its foothold in the Middle East market over the past few years. Export figures have shown encouraging growth, but the current war-like situation threatens to disrupt this upward trajectory.

Speaking to NDTV, GTABA Secretary Dinesh Bihani shared key insights into the prevailing scenario. "Recently, India exported a record 280 million kilograms of tea. Out of this, East Asian countries accounted for 122.50 million kilograms. Last year, we received very good returns from Iran for orthodox tea. However, due to the present geopolitical tensions, we may face export-related challenges," he said.

Bihani clarified that, at present, there is no immediate production crisis as the tea season is yet to pick up momentum. "Tea production has not started in full swing since the proper rains are still awaited. Once rainfall begins, production will rise. However, if large-scale production starts in March-April and the Middle East market remains unstable, our orthodox tea market could suffer. Not only Iran, but several neighbouring countries in that region are key buyers of Assam's orthodox tea," he said.

He further pointed out a significant shift within the industry last year. "Many CTC producers converted their output to orthodox tea due to higher export returns. Orthodox tea was fetching Rs 40-50 more per kilogram compared to CTC, which encouraged this transition," he said.

On the logistics front, the association has expressed serious concerns. Bihani revealed that consignments stuck at ports or currently in transit are facing payment uncertainties. "Insurance premiums have increased sharply due to the conflict. Logistics and shipment costs have also gone up. Alternative trade routes are risky and expensive. We have not received clear status updates from some of our clients, and the uncertainty is worrying," he said.

When asked about alternative buyers, Bihani acknowledged the complexity of the situation. "Middle Eastern consumers have a unique preference for orthodox tea. That specific taste demand cannot easily be replicated in other markets. If the situation worsens, producers may have to revert to CTC production, which has strong domestic demand. However, CTC prices have remained stagnant over the past two to three years," he said.

He also noted the role of government support in sustaining the orthodox segment. "Last year, the Assam Government provided a 10 per cent subsidy on orthodox tea. This year, it has promised to increase the subsidy to 15 per cent. This is a major relief for small growers and local tea factories. Their biggest hope lies in continued export growth, as export markets drive better price realisation," he said.

While the industry remains cautiously optimistic, stakeholders agree that prolonged instability in the Middle East could pose significant challenges for Assam's flourishing orthodox tea trade.