Russia imported 171,500 tonnes of tea last year, down 4% from 2012, industry official says

Nevin Barich

MOSCOW , April 1, 2014 (Interfax Information Services) – Russia imported 171,500 tonnes of tea last year, 4% less than in 2012, the president of the association Roschaikofe, Ramaz Chanturiya, said during a Tuesday press conference in Moscow.

"The decrease in imports, as forecast, continued. But the rate of it slowed. In 2012, compared with 2011, the decrease was 5.4%," Chanturiya said.

On the other hand, tea exports from Russia increased to 8,500 tonnes from 7,500 tonnes in 2012. "The Russian tea industry was able to maintain [its] positions on the main sales markets, growing on account of increased deliveries to Kyrgyzstan and Australia," Chanturiya said. "But the main flow goes to Ukraine [and] that direction accounts for 64% of exports," he said.

The tea market in Russia weighed in at 163,000 tonnes last year versus 171,100 tonnes the year before. In terms of value, there was growth of 8% to $1.7 billion in wholesale prices. Tea consumption runs to 1.2 kilograms per capita annually in Russia.

Russia's main tea supplier is Sri Lanka, which provided 32% of its tea last year versus 33% in 2012. India supplies 22.8% (24.2% in 2012) and Kenya 12.2% (11.2%). Russia's imports of Kenyan tea have increased 4% over the last four years. "The competitiveness of Kenyan tea is higher than from other countries [and] the price is attractive [given the] good quality," Chanturiya said. Yet another of Russia's large tea suppliers, China, increased its share of imports to 8.8% last year from 8.3% the year before.

Chanturiya said the structure of imports has not changed much over recent year s. The bulk of the imports - 90.2% - is black tea (91% in 2012).

Consumption habits have been changing over the last few years; people are tending to drink more tea-bag tea. Consumption of tea-bag tea increased to 60% in 2013 from 57% in 2012. "And that trend continues," Chanturiya said.

Speaking of the market situation as regards exchange rate fluctuation, Chanturiya said that tea and coffee prices could go up, as all raw materials are imported. "But inasmuch as a significant part of the product is already being produced in Russia, that growth could be offset by the ruble component," he said. "We are now less [affected by] exchange rate fluctuation," he said.

The government has to more actively support tea exporters, Chanturiya said, particularly with canceling duties on filter paper. That is not produced in Russia, and will not be in the coming few years. Also, duties on some kinds of raw plant material that does not grow in Russia should be done away with. Roschaikofe also wants to see VAT lowered to 10%. The Russian consumer needs to have tea, black tea at the very least, available (and affordable).

Roschaikofe unites eighteen companies that are the main tea and coffee market operators.

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