Tea traders in Assam fear export halt due to closure of Strait of Hormuz by Iran

Dinesh Bihani, Secretary of Guwahati Tea Auction Buyers Association, said that the immediate price slump is unlikely given the fact that the tea production season is yet to commence.

Guwahati: The sudden closure of the Strait of Hormuz by Iran due to the military strikes by Israel and the United States has raised fears of a halt in exports of teas from India, particularly the premium orthodox tea produced in Assam.

Nearly 50 per cent of Assam orthodox tea is exported to Iran, Kuwait, Bahrain, Qatar, Saudi Arabia (Eastern ports in the Gulf) and the United Arab Emirates and nearly 41 per cent of the consignments are transported via Strait of Hormuz.

Tea traders and estate owners in Assam, therefore, fear that exports could be impacted if there is no halt in the conflict and movement of ships through the Strait of Hormuz is restored.

"If one were to look at the total tea export figures of 280 million kgs attained during 2025, almost 41% of teas exported by India pass through the Strait of Hormuz. The thrust in the export figures have been achieved through quantitative jump in orthodox teas and the countries in the Gulf have registered significant growth. So, the ongoing war with the prospect of trade coming to a halt or suspended due to prevalent tensions is going to impact Indian tea exports, particularly Assam orthodox tea," Shailja Mehta, President of Tea Association of India, a major forum of tea estate owners and traders, said on Thursday.

The association said the volume of Indian orthodox tea exports to UAE, Iran and Iraq stood at 115 million kgs during 2025, boosting exports.

With more than 850 big tea states and thousands of small tea gardens, Assam produces more than half of tea in the world. The state has been trying to promote orthodox tea by offering incentives to growers in order to push exports.

Dinesh Bihani, Secretary of Guwahati Tea Auction Buyers Association, said the potential impact on prices and trade disruption in Iran and other West Asian markets could reduce tea demand, especially for premium orthodox varieties.

"If alternative global buyers do not absorb the surplus supply, prices, particularly for orthodox teas, may face downward pressure. If the conflict intensifies or persists, the impact could deepen further."

He, however, said the immediate price slump is unlikely given the fact that the tea production season is yet to commence. The production will start in March-April.

"But as the new season begins in Assam and there is expectation of higher orthodox production, reduced demand from West Asia could result in a sharp correction in orthodox prices."

Given that the domestic market for orthodox teas is limited and the majority of production is export-oriented, any sustained demand disruption in West Asia would directly impact the Indian tea industry, Bihani said.