Iraqis might feel the pinch as Indian tea prices rise

Shafaq News/ Iraqi tea drinkers, one of the world's top consumers of Indian orthodox tea, are bracing for higher prices as extreme weather disrupts production in India.

India, a major tea producer and exporter, has seen output drop due to heatwaves and floods in key growing regions. Iraq, which imported 33 million kgs of Indian tea between January and November 2023, is the most affected by the price rise.

"Excessive heat in May followed by ongoing floods in Assam have severely reduced tea production," said Prabhat Bezboruah, a senior tea planter and former chairman of India's Tea Board. India's May 2024 tea production plunged over 30% year-on-year to 90.92 million kg, the lowest for that month in a decade.

The price surge began in April amid strong demand and shrinking supply. Average tea prices reached 217.53 rupees ($2.61) per kg by June-end, a nearly 20% increase from a year earlier, according to the Tea Board. Despite some improvement in June production due to rainfall, July floods limited plucking in Assam, which produces half of the country's tea. 

While India's tea exports to other major buyers like Iran and Russia declined in 2023, overall exports to Iraq rose 37% year-on-year to 92 million kgs in the first four months of 2024. The higher prices could support the Indian tea industry, but they strain budgets for consumers in Iraq and other importing nations. 

India has been able to penetrate newer markets like China, Iraq, and Egypt. Indian tea exports in the first four months of 2024 jumped 37% from a year ago to 92 million kg, according to the commerce ministry.

The overall exports of tea from India in the first 11 months of 2023 dipped marginally by 1.7% to 207.14 million kg compared to 209.60 million kg in the same period of the previous year. However, exports to China increased by 13.17% during this period.