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Indian tea in Russia

The Indian tea is likely to revive in Russia after the latest agreement.

india Updated: Nov 10, 2003 15:20 IST

Indian tea exports to Russia, one of the biggest markets, are down this fiscal but an agreement between tea growers of the two countries is holding out hopes of a quick revival.

The memorandum of understanding between the Indian Tea Association (ITA) and Russia's Golden Elephant Company on trade facilitation would augur well for Indian exporters, say ITA officials.

Indian tea exports to Russia fell to 21.89 million kg in the first six months of the current financial year from 27.63 million kg during the corresponding period last year.

"Exports will, however, grow in October-March," said ITA president CK Dhanuka. ITA is also hopeful of bettering last year's export performance.

Price realisation of tea exports to Russia is also down to Rs 62.14 per kg this year from Rs 64.64 last year.

ITA is, however, confident that the agreement with Golden Elephant Company, one of Russia's biggest tea firms, would help improve exports.

Other Russian companies like Orimi Trade, Grant Tea House, Tea World Company and Sapsan have also shown keen interest in increasing their procurement of Indian tea this year.

Russian companies have told ITA that Indian exporters would have to improve quality and send more orthodox tea, the preferred variety in Russian homes.

India's overall tea exports declined by 28.34 per cent to 71.54 million kg from 99.83 million kg in the corresponding period last year, ITA figures said.

The fall in exports was mainly because of lower demand from traditional markets such as Russia, Britain, Iraq, the United Arab Emirates and the Commonwealth of Independent States (CIS).

While exports to Iraq fell by 20.19 million kg, those to Russia were down by 5.74 million kg. In the same period, world tea exports came down by 39.5 million kg -- from 574.2 million kg to 534.7 million kg.

Another reason for India's poor showing was the emergence of Chinese tea as a formidable rival.

While known tea exporting countries like Kenya, Sri Lanka and Bangladesh registered a decline in exports, China logged an increase of 10.4 million kg in exports between January and June.

However, some Indian tea exporters are drawing solace from a burgeoning market in Pakistan.

Pakistan imported 3.12 million kg tea in 2002 but has already imported more than 6.5 million kg in the first six months of this financial year (April-September).

Indian tea exports to Pakistan picked up after an Indian business delegation visited that country in July and signed a deal to export 10 million kg of tea this year.

Pakistan imports about 140 million kg of tea, almost 55 per cent of which is met by Kenya.

Pakistani traders last week signed a major contract to buy one million kg of tea from plantations in Tamil Nadu and Kerala.

First Published: Nov 10, 2003 00:00 IST