Tamil Nadu: Tea exporters concerned over rising freight charges
Iraq is among the largest buyers of Indian tea, while West Africa, the USA, China, and the United Arab Emirates also import tea in significant quantities, but shortage in container availability is causing disruptions
A tea garden in the Nilgiris
COIMBATORE: Increase in freight charges and unprecedented shortage in container availability for shipments are causing disruptions in tea exports.
Even though there are signs that tea exports have picked up gradually following the ceasefire between Israel and Iran, the exporters are concerned over a manifold increase in freight charges.
“The Israel-Iran war has caused disruptions in container movement, and shipments are being held back for a long time. There is an acute shortage of empty containers. Things are yet to become normal in the post-war scenario,” said Dipak Shah, chairman of South India Tea Exporters Association.
According to Shah, the freight rates increased significantly by US$600 for a shipment to the USA this July.
“Iraq is among the largest buyers of Indian tea, while West Africa, the USA, China, and the United Arab Emirates also import tea in significant quantities,” he added.
India’s tea exports reached a ten-year high of over 250 million-kg in 2024, which is a substantial increase of around 30 million kg as compared to the previous years. Of this, South India’s exports come around 120 million-kg and comprise a significant 30 million-kg of tea to Iraq. Mainly, orthodox tea is exported from India.
“It would be incredible now to achieve even the volume of exports achieved last year. Besides the global disruptions, the quality of the produce has also dipped due to heavy yields,” said Shah.
However, B Venugopal, founder of Nilgiris Small Scale Tea Growers Awareness Centre, said that it’s only a usual phenomenon for tea manufacturers to lower their price, citing multiple reasons.
“As exports to those countries are not in significant volume, the impact may only be meagre,” he said.
A bountiful yield has led to the cost of tea powder reducing by 25 per cent over the last two months.
“Its price has dropped now to Rs 90 per kg from Rs 150 per kg last year due to surplus production. There is an increase in yield by over 30 per cent,” said K Kumar, a tea manufacturer from Coonoor.
The months of May and June, as well as October and November, are the peak tea harvesting seasons. Currently, the Coonoor auction centre gets a weekly arrival of up to 25 lakh kilograms of tea as against last year’s 17 lakh kilograms.
Meanwhile, Sree Kumar, secretary, Coimbatore Tea Auction Centre, said that over 500 tonnes of tea from across South India, including Kerala, Karnataka and mainly from the Nilgiris and Valparai across Tamil Nadu, would arrive on a weekly basis at the auction centre for sales. “And, almost 80 per cent would be sold out,” he said.
