Tea News Recap | Hormuz Crisis | Tariff Refunds | China Tea Export Surge

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The sudden closure of the straight-of-arm move, one of the world's most critical maritime

choke points, is sending shockwaves through the global tea trade.

The narrow waterway connecting the Persian Gulf to the Arabian Sea handles a substantial

share of shipping bound for Gulf markets, including tea destined for Iran, the United

Arab Emirates, Iraq, and Pakistan.

With commercial shipping now disrupted by escalating military conflict in the region,

tea shipments from India, Sri Lanka, and East Africa to Iranian ports have effectively

halted.

Industry leaders warned that the consequence could be severe for producing countries that

depend on Gulf markets.

George Ramoga, managing director of the East African Tea Trade Association, said the

conflict could rapidly destabilize Kenya's export-driven tea sector.

Holt

The Iran War and the Middle East geopolitical conflict will make Kenya lose over 20 percent

of the Middle East export market, and the logistics disruption caused by Iran blocking

the home-move straight may further impact the 40 percent exported to Pakistan, said

Omuka.

He warned that the combination of lost markets and disrupted shipping routes could produce

cascading effects across the industry.

Quote, logistics costs are likely to skyrocket with depressed demand at auction.

This will negatively impact tea prices at the auction and smallholder farmers' income.

Kenya's tea economy is heavily dependent on exports with the Middle East and Pakistan

among its largest markets.

When these routes become unstable, the entire supply chain from auction clearance to small

holder payments can be affected.

The Homoos' disruption is also compounding an already fragile situation between Kenya

and Iran, where tea exports have been under strain, such a major fraud scandal involving

the Iranian-Importer Deb's tea company erupted in 2023.

Diplomatic negotiations between the two governments have tried to restore the trade relationship.

Omuka confirmed that discussions through the Kenya-Iran Joint Commission have been ongoing.

Quote, the government formed the Joint Technical Committee to resolve the impasse and restore

tea exports to Iran in August last year.

As a member of the JTC, and the matter has not been resolved, end quote.

Now the outbreak of open conflict in the Gulf risks freezing trade altogether.

The consequences extend far beyond Kenya.

The Strait of Homoos is a key artery for global energy flows and disruptions there have

already pushed oil prices higher, immediately raising costs for shipping lines and exporters,

higher fuel prices ripple directly into the tea trade through container freight rates,

insurance premiums and logistics surcharges.

Shipping analysts warned that freight costs could climb rapidly if tankers and container

vessels are forced to reroute around conflict zones or face increased insurance costs.

The disruption also arrives at a time when global logistics networks are already strained,

tax on commercial shipping in the Red Sea during a past year force, many vessels to

divert around the Cape of good hope, dramatically increasing transit times between Asia, Europe

and Africa.

Now instability in the Gulf threatens yet another critical trade corridor.

For tea exporters, the immediate effects are already becoming visible.

The price of shipping a 20 foot container has surged from around $2,000 to $3,500 and

may rise to $4,000 according to Drury.

The broader danger is the way instability can distort vessel deployment and weaken schedule

integrity rights drury.

If ships are delayed, held back or rerouted to avoid high risk areas, container positioning

can become unbalanced and equipment availability can tighten.

That in turn can reduce sailing reliability, extend transit times and create uncertainty

for exporters and buyers that depend on predictable delivery windows.

Buyers in Gulf markets are delaying purchases, shipments are slowing and auction demand may

weaken as uncertainty spreads through trading houses and blending operations.

With tea prices already under pressure in some producing regions, a sudden collapse

in demand from major export destinations could push the market into a period of volatility.

For smallholder farmers, particularly in Kenya, where millions depend on tea income, the

consequences could be immediate.

Business insight.

The crisis in Hormones reveals just how dependent the global tea trade is on a handful

of maritime choke points.

From the Red Sea to the straight of Hormones, disruptions along these routes could quickly

cascade through the entire supply trade.

Modern trade runs on a highly concentrated logistics infrastructure, when those arteries

are blocked to the impact travels quickly, from ports and brokers to auction floors and

smallholder farms.

And in a conflict driven shipping crisis like this one, the biggest risk for the tea industry

isn't just higher freight costs.

It's the sudden loss of markets that exporters depend on to keep the global tea economy moving.

A U.S. court has ordered the government to refund billions of dollars in tariffs imposed

under President Donald Trump's emergency trade powers for good ship to the United States

over the past year.

Tea importers alone may have paid roughly 60 million in tariffs since the policy took

effect in April 2025, many that could now be refunded if the ruling stands.

Tea imports totaled about 590 million during the past 12 months.

The estimated refund is based on a 10% flat rate, but importers of Chinese tea faced much

higher rates.

The broader tariff system brought in 287 billion in tariff revenue in 2025, including 133.5

billion collected under the emergency authority that was later deemed illegal.

The U.S. Court of International Trade ruled that the administration did not meet the legal

requirements to use emergency powers for tariffs.

The ruling orders the government to refund duties collected under that authority.

Importers challenged the policy quickly, arguing that the administration had expanded

the definition of emergency beyond what Congress intended.

Many businesses later filed lawsuits.

This week, the court stated that suing the government is not necessary to recover tariffs.

Roof of payment is enough for a refund.

For importers and tea brands, these refunds would essentially undo a year of increased

import costs that affected the market through higher prices and pressure on profits.

The U.S. imports all of its tea from countries like India, Kenya, Sri Lanka, Vietnam, and

China.

Some small tariff hikes can lead to high costs across the supply chain.

It remains uncertain whether the decision will be appealed, and how soon refunds will

be issued.

Business Insight

For the tea trade, the bigger story might not be the refunds themselves.

It's the volatility.

Tea supply chains are already dealing with shipping disruptions in the Red Sea and the

straighter promos, which have been raising freight costs amid geopolitical tensions that

affect major consumer markets.

Adding unpredictable tariff policies to that mix makes importers face planning environment

where costs can vary greatly from year to year.

If the court's ruling stands, it could mark a turning point, prompting future administrations

to think more carefully before using emergency powers to reshape global trade flows.

For tea buyers, that's the ability alone might ultimately be more valuable than the

refunds themselves.

China's tea exports expanded sharply in 2025, reinforcing the country's position as

the world's largest supplier of green tea, and highlighting the growing geographic diversification

of global tea demand.

According to newly compiled export data distributed by CFNA, China shipped 419 million kilograms

of tea in 2025, an increase of 12.1% over 2024.

The growth was driven overwhelmingly by green tea.

Green tea exports totaled 369 million kilograms, accounting for 88% of all tea shipped from

China and rising 14% year over year.

The scale of that dominance is striking, nearly nine of every ten kilos of green tea exported

worldwide, who shipped by China last year.

Black tea by comparison remains a much smaller segment of China's export portfolio.

Shipments totaled 26.2 million kilograms, representing about 6.3% of exports, though the

category still recorded a respectable 6% increase over the previous year.

Oolong tea exports moved in the opposite direction.

Shipments declined 9.8% to 13.9 million kilograms, reflecting weaker demand in some traditional

markets and shifting trade dynamics across East Asia, taking together the numbers underscores

structural reality of the global tea market.

China is not competing directly with the world's major black tea exporters such as India,

Kenya, and Sri Lanka, instead trying to dominate the global green tea trade supplying markets

across North Africa, the Middle East, and increasingly Western Africa.

People remained China's single largest export destination in 2025.

Imports there reached 91.6 million kilograms, up 13.6%, reinforcing Morocco's rule as

one of the world's most important green tea markets.

Chinese tea is a central ingredient in Morocco's traditional mint tea culture, and demand has

remained consistently strong.

Morocco has a population of 40 million people, but supplies tea across North Africa, which

is home to 279 million people.

The most striking developments in the export data came from emerging African markets.

Shipments to Coda Diaries surged more than 300% while exports to Chad rose roughly 147

reflecting rapid growth in West African tea consumption.

These markets are still relatively small compared with Morocco, but their growth rates point

to an important trend.

The continued expansion of tea consumption across Africa where population growth and urbanization

are increasing demand for affordable beverage staples.

Or global tea traders, China's export growth also highlights the size of the country's

production system.

China's tea industry operates at a scale unmatched by any other producing nation, with large

volumes of green tea moving through domestic processing and export channels each year.

This production scale enables Chinese exporters to supply large markets consistently and at

competitive prices, especially in the green tea segment.

As a result, a global tea market has developed, with different producing regions specializing

in distinct styles.

India, Kenya, and Sri Lanka remain the main suppliers of black tea to many markets.

While China dominates the green tea trade across North Africa, parts of the Middle East

and West Africa.

As the ban continues to rise across Africa and emerging markets, China's export trajectory

indicates that green tea will remain one of the most dynamic segments of the global

tea trade in coming years.

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