Tea farmers in India heave sigh of relief, as West Asia truce offers hope for exports

Nilgiris: The tea industry across the country breathed a sigh of relief as the 'Trump-brokered' uneasy 'peace', led Iran and Israel to halt the conflict. The outbreak of hostilities had severely disrupted tea exports, particularly to Iran and other key West Asian markets, leading to significant financial strain across the tea industry. The friction also had a cascading effect on green leaf prices, hitting farmers hard.

India exports 25–30 million kg of Orthodox tea to Iran annually, and West Asian countries consume approximately 90 million kg of Indian tea. 

Both tea dust and leaf prices drop
The war in the region had stalled shipments, stranded consignments mid-transit, and created a climate of deep uncertainty over trade routes. The price of green tea leaves dropped by ₹2 to ₹4 per kg in the weekly market of Coonoor, the tea hub of the industry in Nilgiris. The price of 'made tea' also dropped by ₹10-20 in the South Indian auction centres. Industry experts say the price may register a further dip in June.  

Export slump strains tea farmers
The downturn began in April, following India–Pakistan border tensions, which affected demand from Pakistan, a major buyer of South Indian tea. Iran prefers the premium Orthodox tea, while in Pakistan, the demand is for stronger South Indian tea. The border friction between the two countries heightened at a time when the tea exports to Pakistan from India had been picking up gradually.  

"The Indian tea sector is witnessing a significant 15–20% drop in green leaf prices, driven by disruptions in global trade routes and weakened export demand following the Israel-Iran conflict, " said Sreejith A K, National Vice President,  Confederation of Indian Small Tea Growers Association (CISTA). He told Onmanorama the unrest hit shipments to key markets like Iran, Russia, the UAE, UK, and US—major buyers of Indian tea. "Despite stable production and quality, the slowdown in exports has directly impacted farm gate prices", Sreejith said, adding that tea growers are now under severe financial strain, struggling to cover even basic input costs.

He urged the state and union governments to bring in urgent policy support and intervention to mitigate the impact on tea growers and protect their livelihoods from the broader consequences of adverse geopolitical developments. According to Shihab K K of MA Green Leaf, a supplier in Gudalur (Nilgiris), the price of made tea had dropped by ₹15–20 per kg, which was also reflected in the green leaf market in the region.  "The price of tea dust at the auction centre at Coonoor, which was ₹120 / kg and above last month, came down to as low as ₹90 per kg last week", he pointed out. 

The monthly price fixed by the Tamil Nadu Small Tea Growers Industrial Cooperative Tea Factories Federation, popularly known as INDCOSERVE, was ₹17.50 per kg of green leaf for April, whereas it dropped to ₹14.50 this month. Based on the weekly auction trends of the Tea Board of India, the prices may go down further in June.