Indian tea industry looks at Russia to increase exports

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Indian tea industry looks at Russia to increase exports
Out of the 208 million kg of total tea exports from India, only 50 million kg ends up in Russia and nearby countries. Whereas these countries consumes about 220 million kg of tea annually.
Though there is no lack of demand for tea in domestic markets, but the Indian tea industry has been facing plenty of the problems, this is mainly due to increasing production which is fast outpacing the rise in demand; the Indian tea manufacturers are looking at foreign markets to increase their exports.

Currently, India exports about 208 million kg of tea annually. But in last 6 months, the exports have fallen by 9% to 89 million kg. So in a bid to revive the exports again, Indian tea industry is planning to woo Russians, which is the world's fourth-largest consumer of tea. For this, a delegation of Indian tea producers, merchant exporters and auctioneers is set to visit Russia and other nations in the region next month.

Out of the 208 million kg of total tea exports from India, only 50 million kg ends up in Russia and nearby countries. Whereas these countries consumes about 220 million kg of tea annually.

But even if India manages to increase their share of tea export to these regions, the producers or exporters will still face many other problems, including tough competition from other tea producing nations like Sri Lanka. Sri Lanka exports about 60 million kg to these regions and is a major player in tea export market as it produces more than 340 million kg of tea every year.

But demand from Russia and nearby region is not the only reason why Indians are interested in increasing exports, another reason is that they wanted to encash the falling Rupee value against the Dollar, as this will help the exporters to increase their earnings and hence they consider that it is a favourable time to push to increase the exports. Russia, on the other hand has a soft corner for Indian products.

Another reason for this export push is that exports to two other major tea consumers including Egypt and Pakistan have not picked up as expected. Hence Indian industry is looking for other target markets to increase their presence.

Another country which is looking attractive to Indian tea exporters is Georgia. Georgia is located at the crossroads of western Asia and Eastern Europe. It is bounded by the Black Sea on west by Russia in north, by Turkey and Armenia in South and by Azerbaijan in the south-east. This makes it a good choice for creating a major hub for Indian tea in that region. So if Indian tea can make its presence felt in Georgia, then it can have easy access to Turkey, which is a major tea-drinking nation. And this will only further help boost the ambitions of Indian tea industry.

India Infoline News Service | Mumbai | August 30, 2015 19:34 IST Indian tea industry looks at Russia to increase exports
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