MUMBAI: India tea exports to Iran are likely to surge by around 50 percent in 2013 from the previous year as the sanctions-hit country increases purchases to replenish inventory and make use of one of its few remaining payment channels.
Iran is one of the biggest buyers of the south Asian country’s tea and prefers to buy orthodox grade. Its purchases in 2013 are likely to rise to 20-21 million kg from about 13.78 million kg a year ago, worth Rs3.2bn ($53.10m), industry officials said.
Higher orthodox purchases by Iran will help India to maintain exports at last year’s level, as overseas demand for CTC (crush-tear-curl) is weak due to cheaper supplies from Kenya.
“There is strong demand from Iran. Since the payment issue has been settled I don’t see any problem in exporting. There are lots of export orders,” said Aditya Khaitan, managing director of McLeod Russel, the world’s biggest producer of tea.
India’s tea exports to Iran fell 28 percent in 2011 from the previous year, after India’s central bank, under pressure from the United States, ended a clearing mechanism which had been used to settle trades. The move also hit oil imports from Iran.
Reuters
