KOCHI: The escalating conflict in West Asia has begun to ripple through South India's plantation economy, disrupting exports of tea, coffee, cardamom and other agricultural commodities that rely heavily on Gulf markets.
Exporters are reporting delayed shipments, soaring freight charges, insurance hurdles and weakening demand, raising concerns over shrinking margins and mounting losses for growers and traders alike.
Tea and coffee, two of South India's biggest plantation exports, are among the first casualties of the crisis.
Cherian M George, CEO of Harrisons Malayalam, the largest tea producer in South India, said nearly 40 per cent of India's tea exports are linked to West Asian markets.
"India exported around 280 million kilograms of tea in 2025, one of the highest export volumes in recent years. Nearly 40 per cent of that went to the UAE and Iraq," George said.
According to him, West Asia has become even more important after sanctions and payment issues reduced exports to Iran over the past few years.
"If you look at Indian tea exports today, about 40 per cent is dependent on West Asia. That trade has either slowed down or not taken place. The remaining 60 per cent goes to CIS countries, Russia and Europe, where orders continue despite some delays in shipping and container availability," he said.
The situation has worsened because of disruptions around the Strait of Hormuz and Jebel Ali, the region's largest transshipment hub.
"West Asia is affected very badly. I am routing some shipments through Yemen and then by road to Oman, but these are only small quantities of packet tea. Bulk tea exports are not moving the way they used to," George added.
Coffee exporters are also feeling the heat. Gigi Cherian, a planter whose family once owned nearly 2,000 acres under the Glenburn Group of Estates in the Nilgiris, said the conflict has amplified existing pressures on the sector.
"The impact is already visible in prices and logistics. Freight rates have surged, shipments are taking longer routes, and exporters are facing uncertainty over deliveries. For growers, the biggest concern is cash flow because sales are getting delayed while production expenses continue," he said.
Industry leaders point out that the disruption has come at a critical time for coffee growers, who need liquidity to fund pruning, fertiliser application and estate maintenance after the harvest season.
Tea remains the plantation crop most exposed to the region. Rajan Sanjith, secretary of the United Planters' Association of Southern India (UPASI), said almost 44 per cent of India's tea exports were shipped to West Asian countries last year.
"Iraq is one of the largest buyers. If you combine the UAE and Iraq, nearly 100 million kilograms of tea went there," he said.
The fallout is extending to the spice sector as well, particularly cardamom, for which Gulf countries are among the biggest buyers.
Stany Pothen, head of the Cardamom Farmers Federation, said exports to key destinations such as Dubai, Qatar and Saudi Arabia have slowed sharply.
"Most of the cardamom goes to the Gulf region. Dubai, Qatar and Saudi Arabia are our biggest markets. Containers have not gone there, and some ships carrying spices have even returned to Mumbai," Pothen said.
The disruption has translated into a sharp correction in prices.
"Demand has fallen, and prices have declined from around Rs 2,800 per kg to Rs 2,400 per kg. The drop is about Rs 400-500 per kg since the crisis began," he said.
According to Pothen, the impact extends beyond cardamom.
"Coffee and almost all consumables exported from Kerala have been affected. Exporters are spending much more to ensure shipments reach their destinations, resulting in severe losses."
UPASI president Ajoy Thipaiah said logistics bottlenecks are worsening the situation for exporters across commodities.
"Freight rates have gone up by 30-40 per cent. Indian insurance companies are not providing maritime insurance, and there is a shortage of feeder vessels from Mangaluru to Colombo, where cargo is transferred to mother ships," he said.
The shortage of vessels has led to significant delays.
"My coffee shipment was ready on April 27, but could be loaded only on May 7. In many cases, delays are much longer," Thipaiah said.
Shipping companies increasingly opting for the longer Cape of Good Hope route instead of the Suez Canal have further increased transit times and costs.
"Holding costs have become very high, margins have come down drastically, and importers are unwilling to absorb the increase in freight charges," he added.
While exporters are trying to divert shipments to Europe, Russia and CIS countries, industry leaders said those markets cannot immediately compensate for disruptions in West Asia.
With the Gulf remaining a crucial destination for South Indian tea, coffee and spices, plantation stakeholders fear that a prolonged conflict could leave growers, exporters and processors facing one of their toughest trading seasons in recent years.
