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Tuesday, July 13, 1999

Indian delegation to urge Russia to buy more tea 

PRESS TRUST OF INDIA  
New Delhi, July 12: An Indian tea delegation will be arriving in Moscow this evening to hold talks with Russian officials and urge them to buy more tea from India as per the six-year Indo-Russia tea agreement which began this year.

"The team will basically impress upon the Russian officials to buy more tea as there has been no offtake as agreed in the agreement. Moreover, the year is coming to a close and hence there is a sense of urgency," official sources said.

Under the Indo-Russia tea agreement, Moscow agreed to buy at least 100 million kg tea every year. The agreement was signed by the Indian Tea Board and the Russian Tea and Coffee Association last year.

The Indian delegation, led by Tea Board chairman SS Ahuja, comprises representatives from the industry mainly drawn from the Indian Tea Association and United Planters Association of South India (Upasi).

A Tea Board official said that India would consider all options, including barter trade, to sell tea to Russia.

India is keen on selling more tea to Russia as decreased purchases by Moscow has particularly been responsible for poor exports this year.

For the January-May period this year, tea exports from the country slid by 17 per cent to 57.17 million kg from 68.59 million kg during the same period last year.

Upasi, in particular, has asked the government to consider exports on short-term barter basis to boost sagging prices of the commodity.

According to Upasi, while average cumulative price between January and May last year was Rs 79.15 a kg, this year during the same period it has declined to Rs 59.39.

The prices are ruling low mainly in view of drying up of export demand, especially to Russia which is facing a decline in economy.

During the talks, besides asking Russia to increase offtake of tea, the Tea Board is also likely to take up the issue of higher customs duty on imports of packaged tea imposed by Moscow.

Russia had recently raised the duty on packaged tea imports to 20 per cent, while pegging the levy for bulk tea at 5 per cent.

This has affected Indian tea since a lot of teas are exported in consumer pack from the country in order to create brand image of Indian tea among Russian consumers.

This duty has led to a situation wherein exports are now made in bulk besides mixing of Indian tea with Indonesia and Bangladesh tea.

Official sources said Russia could be asked to be more active at the auctions across the country.

"There seems to be increased participation of Russia in the auctions during the last couple of weeks. It has also led to some improvement in prices," they said.

Russia accounts for nearly 90-100 million kg of the average 200 million kg tea exports from India and bulk of the quantity are being shipped from south India.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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