Lanka-Russia bilateral trade tops $ 360 mn

As trade between both countries topped $ 360 million, the Russian Federation, the single largest buyer of Pure Ceylon Tea, is set to significantly increase bilateral cooperation across diverse economic sectors. “We want to extend our support to Sri Lanka’s power and energy sector. To this end, a Russian nuclear power team with scientists will arrive in January to study Sri Lanka’s energy sector outlook,” said Alexander A Karchava, the new Russian envoy to Sri Lanka, recently.

Karchava expressed these views in Colombo during his first courtesy call on Minister Bathiudeen at the Ministry of Industry and Commerce. Colombo is also the first South Asian posting for Karchava who previously served in SE Asian locations Singapore, Malaysia and Thailand.

“Sri Lanka-Russia bilateral cooperation has been growing from strength to strength since the establishment of diplomatic relations in 1957. Our bilateral trade in 2011 stood at $ 360 mn, an increase of 34 % in comparison to 2010. However, despite this trade volume, we believe there is yet unrealized trade potentials between the two countries which we can synergise jointly,” Minister Bathiudeen said. “Almost 89 % of our exports to Russia are Pure Ceylon Tea. This also shows the strong potential for export diversification from our side,” he said.

“We want to extend our support to Sri Lanka’s power and energy sector. To this end, a Russian nuclear power team with scientists will arrive in January to study Sri Lanka’s energy sector outlook. We are also interested in the proposed Trincomalee Port and Industrial Zone Development project,” said Karchava .” I also agree that despite bilateral trade at $ 360 mn, there is yet unrealized trade potentials that we need to jointly explore” Karchava stressed. He said, “We should also strengthen people to people exchanges. There is a strong presence of Sri Lankans in many top Russian education institutions while almost 21,000 Russian tourists visited Sri Lanka this year.”

Minister Bathiudeen added,“We thank the Russian Federation for its investment interests and on-going support extended to Sri Lanka. I believe that such Russian investment initiatives can strongly assist in bringing down our manufacturing and energy costs so that we can continue to sustain our competitiveness in international markets. Russia can invest here and synergise the ISFTA (India-Sri Lanka Free Trade Agreement), and the PSFTA (Pakistan-Sri Lanka Free Trade Agreement) to access the huge South Asian markets.”

According to the Department of Commerce of Sri Lanka, Russia is the topmost Pure Ceylon Tea buyer in the world. In 2011, more than 54,200 metric tonnes of Pure Ceylon Tea was absorbed by the Russian Federation to the value of $ 251.08 mn.

On average, Russia captures about 17 % of annual Ceylon Tea exports. Bilateral trade between Sri Lanka and Russia too has been growing significantly despite the disintegration of former Soviet Union in 1991. The total trade turnover between the two countries which stood at US $ 15 million in 1991, reached US $ 196 million in 2009 after which it topped $ 360 mn in 2011 recording a 34 % increase compared to 2010.

The balance of trade has continuously been in favour of Sri Lanka during the last decade.