Rising West Asia tensions weigh on tea shipments from Kochi auctions

Logistical challenges pose significant hurdles for Indian tea exporters, whose competitiveness may be compromised as they navigate increased expenses and uncertainty in key Gulf markets

The escalating conflict in West Asia is weighing on tea shipments from Kochi auctions, with overseas demand turning subdued, particularly from the violence-hit markets.

However, strong participation of CIS exporters has led to a strong demand for orthodox teas in Sale 37. Of the 1,91,008 kg offered, 89 per cent was sold, while the average price realisation increased by ₹4 per kg to ₹188 from ₹184 in the previous week, traders said.

Reduced tea availability on the auction platform, resulting from lower production due to adverse climatic conditions in the high ranges, also supported prices, traders said.

Logistical challenge

Anil George Joseph, president of Tea Trade Association of Cochin, said the ongoing conflict and disruptions around the Strait of Hormuz were posing a significant logistical challenge for Indian tea exports, particularly to the Gulf markets. The impact on tea prices, however, is not necessarily upward. While supply constraints could support prices if demand remains firm, prolonged uncertainty, delayed shipments and weaker buyer confidence could have the opposite effect.

The impact on tea prices, however, is not necessarily upward. While supply constraints could support prices if demand remains firm, prolonged uncertainty, delayed shipments and weaker buyer confidence could have the opposite effect, he said.

The immediate concern for exporters, he said, is the sharp rise in freight, bunker fuel, war-risk insurance and other logistics expenses. Rerouting vessels, longer transit times, congestion and disruptions at key Gulf and transshipment ports could lead to higher freight surcharges, shipment delays, container shortages and uncertainty over delivery schedules. For Indian tea, he said, where a substantial share of exports is linked to West Asian markets, the disruption can directly affect order execution and competitiveness.

The larger issue, therefore, is margin pressure rather than tea prices alone. Exporters may find themselves in a situation where tea prices remain stable or even soften, while the cost of delivering the tea to the buyer continues to rise.

Longer transit periods could also increase working-capital requirements, demurrage and detention exposure, while disruptions to banking and payment channels can delay export realisations, he added.

Published on September 11, 2026