The value of tea exports imported by Iran plummeted by 62% to $185.75 million during the first ten months of the Iranian calendar year, which begins in March, according to the Islamic Republic of Iran Customs Administration.
Volume declined to 33,683 metric tons as shipments from India dwindled.
Iran normally buys about 21% of India’s tea exports, around 30 to 35 million kilos of mainly orthodox tea. Indian traders reported that exports to Iran declined by 15.7 million kilos from January to October 2023.
Tea exports from India are down overall, but shipments to Iran represent the most significant drop.
Indian producers say restrictions on Iran’s inability to trade in US dollars from 1979 and European sanctions imposed in 2010 prevent timely payments. Trade is further complicated by the higher transport cost in war-ravaged regions, including the Black and Red Seas.
Iran also imported lower quantities of tea from Sri Lanka and UAE. According to the Tea Exporters Association of Sri Lanka, Iran has dropped from 5th to 11th position with a 50% decline in imports in 2023. Iraq was Sri Lanka’s top tea trading partner in 2023, buying 32.7 million metric tons through December. Iran expects to conclude the negotiations agreed to in 2021 to settle a tea-for-oil barter valued at $250 million. Payments amounting to $20 million will continue as installments of $5 million monthly for 48 months.
In November 2023, Iran halted tea imports at the request of Iran’s federal Inspection Organization. Investigators accused the CEO of Debsh Tea, the nation’s largest tea company and sole tea importer, of embezzling $3.4 billion in subsidies (about three trillion in local currency). The funds are budgeted to purchase orthodox grades and tea for blending. Investigators found evidence of currency manipulation and fraud involving customs officials, members of the country’s central bank board, top executives in the food safety department, and office holders. The four-year scheme is the largest embezzlement in Iran's history.
Iranian tea exports also steeply declined by 12,828 metric tons. Value fell by 58% compared to the 2022 fiscal year ending March 2023. UAE is normally the major trade destination, purchasing 8,300 metric tons in 2021. The tea, mainly lower grades used in blending, was valued at $8.8 million that year.
In the past, Iranian growers produced as much as 70,000 metric tons of tea to meet domestic demand. The country ships locally grown tea to 25 countries but at far smaller volumes than in the early 2000s. Tea exports peaked at 21,000 metric tons in 2000 before bottoming out at 4,500 metric tons in 2003 following the imposition of sanctions tied to nuclear weapons development.