Tea prices rise despite loss of Iranian market

• Prices up by Rs. 30–40 over pre-crisis levels
• Export volumes down by 20%

Tea prices at Sri Lanka’s local auctions have risen above pre-crisis levels despite a significant drop in export volumes and a complete halt in exports to Iran, according to the Sri Lanka Tea Board (SLTB).

Speaking to The Sunday Morning Business, SLTB Chairman Rajpal Obeyesekere said that tea exports to Iran had come to a complete standstill amid the ongoing crisis in the Middle East.

He revealed that despite the loss of the Iranian market, the local tea market had remained resilient, with auction prices increasing by approximately Rs. 30–40 compared to pre-crisis price levels. 

The SLTB Chairman added that unsold quantities at auctions were currently averaging around 10–12%, marking an improvement from pre-crisis conditions.

However, Obeyesekere cautioned that the external market remained highly volatile and fluid. He noted that any disruptions in key shipping routes, particularly in the Red Sea or the Gulf of Oman, could adversely impact the local tea industry.

Commenting on the loss of the Iranian market, he revealed that tea varieties traditionally exported to Iran had begun finding demand in alternative markets. 

“Although things are not moving in the direction of Iran, there are other markets that are taking up tea strains usually purchased by Iran, and in fact, those teas have been selling well on average. Some tea strains are not being taken up, of course, but that is a small segment in terms of quantity,” he stated.

Nevertheless, Obeyesekere acknowledged that overall tea export volumes had declined by around 20%. He clarified that this decline was not solely due to the loss of the Iranian market, but also reflected weaker demand and constraints in other export destinations.

Source: The morning