Orthodox tea prices rise due to higher demand from Iran

KOLKATA: Orthodox tea prices have gone up at the Indian auctions due to higher demand from Iran. A kg of orthodox tea is now fetching Rs 250 at the auctions compared to Rs 235 in the corresponding period of the previous year.

"At the Kolkata auctions the offerings of orthodox tea is higher by 5 million kg vis-a-vis last year. The same trend is visible at Guwahati and Siliguri actions," said Mr J. Kalyansundaram, secretary, Calcutta Tea Traders Association (CTTA).

Iran is one of the biggest buyers of Indian orthodox tea. Going by the trend industry officials feel that it's purchases in 2013 are likely to rise to 20-21 million kg from about 13.78 million kg a year ago. Higher orthodox purchases by Iran will help India to maintain exports at last year's level as the global demand for its CTC tea is comparatively lesser due to cheaper supplies from Kenya. Kenyan production is up ny 50 million kg compared to previous year.

"There is strong demand from Iran. Since the payment issue has been settled the exporters can now send teas to Iran without facing much problem," CTTA secretary said. India now pays for 45% of its oil purchases using its rupee currency and Iran can also use rupees to pay for its purchases from India. India produces nearly 80 million kg of orthodox tea.

India exports CTC tea mainly to Egypt, Pakistan and the UK, and the orthodox variety to Iraq, Iran and Russia. In 2012, India has produced nearly 1,100 mn kg of tea and the industry is hopeful that this figure will be maintained this year as well.