Feb 20, 2021
Iran has initiated negotiations with Indian tea commerce to buy whole leaf teas to meet the nation’s home demand. It is ready to pay good costs to the Indian tea exporters and the contracts will likely be signed by the second week of March when new season teas in small portions will slowly begin arriving out there.
Iranians are keen on tea and import top-quality tea from India and Sri Lanka. Though Iran produces 20-30 million kg domestically, the standard of teas isn’t good. That is why the nation imports orthodox teas from India and Sri Lanka. Iran imports 65-70 million kg of tea yearly.
Mohit Agarwal, director at Asian Tea & Exports explained that the Iranian buyers are keen to lift whole leaf or orthodox teas from India. They are offering good prices for these teas.
Sentiment in Iran is upbeat as Covid cases have come down. Also, with Joe Biden becoming the president of the US, they are hopeful that positive steps will be taken towards the sanctions issue.
Agarwal added that the exporters are hopeful to obtain exports of almost 54 million kg to Iran these 12 months, a quantity that was achieved in 2019.
Due to the pandemic and cost issues in Iran, exports had come down in 2020. According to Tea Board of India statistics, India exported 31.06 million kg of tea between January and November 2020, as in contrast to 50.46 million kg in 2019.
Indian orthodox or whole leaf tea producers, primarily from Assam, are closely depending on the Iran market and the gardens in Assam produce around 70 million kg of orthodox teas.”
The United Nations had imposed sanctions on Iran just a few years in the past however allowed Iran to import meal merchandise like tea, and India to import petroleum merchandise. Later, India and Iran’s governments made a Vostro cost mechanism by which a portion of oil import proceeds was transformed to rials and later to the rupee. UCO Bank was authorized to take care of all funds in the rupee. Gradually, India established itself as the biggest tea exporter in Iran, changing Sri Lanka, which didn’t have any particular cost mechanism.
The system was severely affected when the US imposed additional restrictions on Iran and oil imports had been stopped after May 2019. Vostro account thus shrank and since end-2019 funds had been severely affected. Central Bank of Iran restricted rupee allocations and all funds had been delayed for a very long time.
Although many exporters are but to get funds from Iran towards exported teas, however, since sentiment in Iran has turned optimistic, the cost would begin coming quickly. In reality, basmati exporters have begun getting their funds from Iran, which has raised the hopes of the Indian tea commerce.