Iranian buyers have started talks with Indian tea trade to purchase whole leaf teas to fulfill the country’s domestic demand.
The Gulf country, which was badly hit by the pandemic, is ready to pay decent prices to the Indian tea suppliers and the agreements will be signed by second week of March when new season teas in limited quantities will eventually begin arriving in the market.
'Iranian buyers are keen to raise whole leaf or orthodox teas from India,' said Mohit Agarwal, director at Asian Tea & Exports. They are giving us decent prices for these teas. Sentiment in Iran is upbeat as Covid-19 cases have gone down.
Even, with Joe Biden becoming the president of the US, they are optimistic that constructive measures will be taken against the sanctions issue. Agarwal added that the exporters are optimistic to achieve exports of approximately 54 million kg to Iran this year, an amount that was achieved in 2019.
Due to the pandemic and payment issues in Iran, shipments had gone down in 2020. . According to Tea Board of India statistics,as compared to 50.46 million kg in between January and November of 2019, India exported 31.06 million kg of tea during the same period of 2020.
Iranians are fans of tea and import good quality tea from India and Sri Lanka. Although Iran manufactures 20-30 million kg domestically, but the quality of teas isn't really great. Indian orthodox or whole leaf tea manufacturers, primarily from Assam, are heavily dependent on the Iran sector. Assam tea gardens in Assam grow about 70 million kg of orthodox teas. 'Iran will be a powerful customer for orthodox tea this year,' says Vivek Goenka, chairman of Indian Tea Association. The United Nations had placed sanctions on Iran a few years earlier but allowed Iran to import food products like tea, and India to import petroleum products.
UCO Bank was permitted to deal with all payments in rupee. India formed itself as the leading exporter of tea in Iran, succeeding Sri Lanka, which didn't have any unique payment system. The framework was seriously affected when the US placed more sanctions on Iran and oil imports were halted after May 2019.
Agarwal said that while many suppliers were unable to get payments from Iran against exported teas, but because interest in Iran has turned positive, payment will eventually come soon. In reality, basmati exporters have started getting their payments from Iran, which has boosted the expectations of the Indian tea trade.
