PROMOTION - 3 :: 

INDIAN TEA DELEGATION TO RUSSIA NEXT WEEK

BY P S SUNDAR

Tea Board Chairman Siddharth will lead a delegation to Russia from Feb 9 to 15 coinciding with ‘Prodexpo 2015’, the biggest trade event in Moscow.

The visit is being guided by Tea Board’s Moscow office.

Representatives of McLeod Russel India Ltd,. Jayshree Tea Industries, Godfrey Phillips India Ltd., Golden Tips Tea Co Private Ltd, Balaji Agro, Vikrama Impex, Arrum Exporters, Limtex India, Primiers Tea, Indu Tea, JFK International, Bagmahi Group and North Western Cachar Tea Company are among those in the delegation.

Tea Board will hold a special pavilion of 84 square metres in Prodexpo where companies including Jayshree, Primiers Tea, Limtex, Arrum, JFK international, Golden Tips and Godfrey Phillips will display products.

The delegation will have meetings with major buyers including Orimi Trade May Company, Ahamed Tea, Nadin Tea, Rubin Tea, Riston , Mac Tea and retail chains like X5, Magnit and Seven continents.

The delegation is also scheduled to meet the officials of the Ministry of Economic development, Russian Customs, Rospatent, Rusteacoffee Association, central bank and other major banks.

A Buyer-Seller meet is also being planned.  The delegation will present an exclusive event of Indian Tea in a cultural village ‘Ethanomir’.

Russia is the single largest importer of Indian tea and CIS countries, including Russia, account for as much as 25 per cent of India’s overall exports.  While this itself has enough reasons to justify the delegation to Prodexpo, an equally significant factor is that the delegation is visiting in the backdrop of Russia’s import of Indian tea falling in the recent past.  

Russia which imported 49 million kg (mkg) from India in calendar 2011, imported only 46 mkg in 2012 and 40 mkg in 2013.  The imports have fallen further in 2014 and as per the latest data available with Tea Board, till November, Russia purchased only 34 mkg from India against 36 mkg during Jan-Nov 2013. This means, Russia’s import of Indian tea in 2014 is likely to be only 38 mkg – the least since 2006.

The need to boost tea exports to Russia arises also from the reality that it has imported two mkg less in 2014 despite offering the teas for Rs 10 or 28 US cents less per kg.   The average price of Indian tea exported to Russia till  November was Rs 155.61 a kg against Rs 165.07 in the same period of 2013.  In US dollar terms, it was $ 2.56/kg against $ 2.84 in 2013.

Consequently, the earnings from tea exports to Russia have crashed to Rs 530.49 crore from Rs 600.68 crore in 2013.   In dollar terms, the earnings have fallen to $ 87.15 million from $ 103.18 million.   

Russia, and for that matter, the erstwhile USSR, had traditionally been a major importer of Indian tea.   Time was when producers used to manufacture CTC teas exclusively to suit the Russian palate.   Over the years, Russians started showing preference to orthodox teas but the voluminous availability of such teas in India was a concern to them.   Indian producers were concerned about the low price offered by some Russian importers – even last week, some teas were bought at Coonoor Tea Trade Association auction for as low as Rs 47 a kg while the auction average itself was Rs 79.35.

In this backdrop, the real success of the delegation will come about if an impression is left with Russian importers of (1) the availability of quality Indian teas of different grades suitable to them so as to be sure of supplies in future; (2) the need for them to pay prices matching with quality and as determined by global market; (3) signing deals to cover immediate, short and long term business. 

Business transaction as a factor to gauge the success of such delegations arises because many delegations of the past had been exchanged resulting in goodwill.  Now, ‘make in India’ concept of Modi Government expects business transactions to materialise.