Tea Imports Seen Up 5% as Russians Switch From Booze

MTSri Lanka and India were the biggest suppliers of tea to Russia last year.
Russia, the world's largest tea importer, will increase purchases by up to 5 percent this year as consumers shy away from more expensive beverages to better cope with the economic slowdown, an industry lobby group said Monday.

Rusteacoffee head Ramaz Chanturia said he expected that Russia, which relies largely on imports, would raise purchases up to 187,000 tons this year from 178,000 tons in 2008.

"The financial crisis will shift demand to traditional tea from juices, energy and other fashionable and expensive drinks," Chanturia told reporters on the sidelines of the Moscow International Tea Symposium. "However, the quality will suffer."

Russia, which grows little of its own tea, has built up its domestic tea-packing industry after doubling the lowest rate of an import tariff on tea bags to 8 euro cents per kilogram in 2003 and lifting a 5 percent tariff on loose tea in 2007.

Chanturia, whose organization represents Russia's main tea- and coffee-packaging companies, said the country would this year boost tea exports, as well as consumption, as a similar demand trend had emerged in neighboring countries.

"This year, export volumes may rise by up to 2,000 tons," he said.

Chanturia's forecast reversed a short-term estimate made last year, when he predicted that tea and coffee imports would drop by about 20 percent in the three to four months from October.

The drop in imports over this period, which is close to an end, had the effect of pushing down global tea prices to a point where Russia could afford once again to import, Chanturia said.

Sri Lanka and India were the main suppliers of tea to Russia last year.