Financial Times

Iranian market opens for Ceylon tea
Exports of Ceylon tea to the Middle East have increased, driven largely by demand from Iran, which has ended a ban on direct tea imports, and also helped by increased spending power owing to higher revenue from skyrocketing oil prices.

"The opening up of the Iranian tea market after a lapse of three years augurs well for the future," declared Tea Board chairman Niraj de Mel. "High oil prices are also a contributory factor in increased Middle Eastern consumption."

Demand is mainly for low grown teas which make up more than half the island's crop and are produced mostly by smallholders. De Mel is scheduled to visit Iran in November for a Sri Lankan promotional event the first day of which will be dedicated to Ceylon tea.

"Ceylon teas are doing well at the moment with a lot of demand from all quarters," de Mel told The Sunday Times FT. The rapid increase in tea bag consumption in overseas markets was also helping high and mid grown prices at the Colombo auctions as was the sharp depreciation of the rupee.

Ceylon tea exports to Iran rose 15.5 percent to 9.5 million kg in the seven months to July this year. Till now a lot of tea that went into Iran was smuggled from Dubai or Turkey but now shipments can go direct through the port of Bandar Abbas.

Ceylon tea exports to Turkey, most of which ends up in Iran, have increased by 56 percent to 14.4 million kg in the period to July while shipments to Dubai increased 17 million kg from 16.4 million kg.

Exports to Jordan, some of which also go to Iran, rose 17 percent to 8.1 million kg while exports to Iraq are also up sharply to 5.5 million kg from 1.3 million kg - a 323 percent increase.

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