Tea exports to Russia, CIS countries to record increase this year

Hiran H. Senewiratne

TEA EXPORTS: Sri Lanka’s tea exports to Russian and Commonwealth of Independence State (CIS) markets are likely to increase by 13 per cent this year especially for value added tea bags industry sources said.

Industry sources are predicting this increase based on trends and marketing behaviour of the corresponding year 2005, Vice President Asia Siyaka Commodities (Pvt) Ltd Dinal Fernando said. He said in 2004 their was a 2 per cent to 3 per cent increase while in 2005 it recorded a 4.5 per cent dip in Russian and CIS markets due to manifold reasons.

Fernando said this year it is going to be a significant growth where the Russian and CIS tea markets are concerned which normally purchases more than 72 million kgs for a year. With the current trends it would be very much likely to increase tea exports to those markets from 75 million kg to 85 million kg, he said.

Owing to Duty revisions of their importation on value added tea by those governments are benefiting the Sri Lankan tea sector in a tremendous manner, he said. ‘CIS countries including Russia purchase a sizable quantum of high, low grown and orthodox value added tea bags, which Sri Lanka cannot meet the demand at any cost.

‘However, there is a 2 percent to five percent annual increase of those markets according to market trends on the last five years and statistics, he said. In the coming months from July to December prices of tea will pick up considerably going through past trends in the international tea market behaviour. During this period Russia and CIA purchases tea for their coming winter season which is likely to increase by 13 per cent this year, he said.

Another leading buyer Iran is also likely to increase export significantly especially for the well made tippy variety of tea after a major drop of their exports due to the external political crisis due to the nuclear testing issue.

But the situation has settled and they have resumed international trade for a greater extent.

Sri Lanka exports low grown tippy type variety primarily to Iran and its exports has increased significantly.

However, Sri Lanka has a 2 per cent to 3 per cent overall export growth year on year.