Iran keen to buy tea from India despite payment woes.

KOLKATA: Iranian tea importers are exploring ways to solve the payment crisis with India as the country is planning to purchase 20 million kg orthodox tea from India this year.

A nine-member Iranian delegation is in India to negotiate with tea exporters and the move comes at a time when shipments from India have just kicked off. The visit by Iranian delegation is the result of a memorandum of understanding, signed between the Iran Tea Association and the Indian Tea Association in March 2013, which seeks to raise the volume of tea exports to Iran to 30 million kg in a couple of years.

"In the current year, we are expecting 20-21 million kg of tea exports to Iran," said AN Singh, chairman of Indian Tea Association. The renewed Iranian interest in orthodox tea has already lifted the prices of this variety at the auctions. Prices have already appreciated by . 30 a kg and it is currently hovering around . 231 per kg. Increased exports will help tea exporters earn more foreign exchange at a time when rupee is weakening against dollar. In 2012, Iran had imported 13 million kg tea. Iran is keen to buy premium quality orthodox teas that are produced in Assam. Orthodox tea production during the January-June period (2013) by the Indian Tea Association members alone has touched over 16 million kg - up by 7 million kg from the 2012 level.

"The major problem with Iran is the payment problem. Letters of credit (LCs) are being delayed , which is creating a delay in getting payments at our end. We will try to sort out the issue with Iranian buyers so that the movement of tea from India remains smooth. There is still uncertainty in dealing with Iran," said CS Bedi, managing director , Rossell India. Iran, the sanctions-hit country , wants to increase tea purchase to replenish inventory and make use of one of its remaining payment channels.

Source : economictimes.indiatimes.com