IRAN
Renewed sanctions imposed on Iran are causing a sharp downturn in the tea trade.
Sanctions have caused Iran’s currency to nosedive, unemployment to increase, and inflated prices for tea and sugar.
Iran produces only a fraction of the 120 million kilos of tea it consumes annually, making it dependent on imports that are traded in US dollars. Iran was the world’s fifth largest tea importer in 2017, behind fourth-ranked U.K.
Impeding financial transactions crippled Iran’s tea trade in 2012. The new round of sanctions imposed in August includes a US threat that may lead to financial restrictions on other countries that continue to trade with Tehran. This makes Iran’s largest tea trading partners in India, Sri Lanka, and Kenya vulnerable. Last year India supplied Iran with 29 million kilograms (m.kg) of tea worth about $30 million. Sri Lanka exported 27 m.kg and Kenya supplied 20 m.kg. An unknown amount, estimated at several million kg, was smuggled into the country.
Tea exports are not banned, the US simply intends to prevent financial circumventions from occurring. It is unlikely to go so far as a blockade.