| Russian tea order hangs in limbo-Business Standard
The Indian tea industry, especially the south Indian one, is keeping their fingers crossed since the fate of a Russian export order for 50 million tonne still hangs in limbo.
Though exports of the first shipment were to take place in April this year, no news from the Russian side has aroused serious doubts in the minds of the exporters regarding the deal.
Early this year, Russia had placed orders for 50 million tonne of tea with India to be imported in two tranches under the Rupee-Rouble Agreement.
This order was an outcome of the Russian president Vladimir Putin's visit to India in October last year.
Speaking to Business Standard, United Planters Association of Southern India (UPASI) sources said, "Though there has been an inter-governmental agreement for the commodity, any actual off take to Russia is yet to happen. The importers from the country have still not contacted us or made any reference to the order."
It seems the market, which imports around 100 million tonne of the commodity annually, has suddenly turned cold to India and is warming up to Sri Lanka, China, Vietnam and other South East Asian nations.
"One of the main reasons is that they supply tea at a much cheaper rate than India," the sources added.
"While India is offering tea at around $1 a kg, countries like China, Vietnam and Indonesia are supplying it at $0.60-0.70 a kg," a trader said and added that these lower prices had directly taken away India's market in Russia.
Traders say that these countries could afford to sell at a cheaper rate since their cost of production was low compared to India.
UPASI added that it was unlikely that India would be able to export the first order by April.
Russia and the former Soviet Union was traditionally an Indian market and the Indian tea exporters enjoyed certain privileges under the Rupee-Rouble Agreement. Recently, India had also lost a huge export order for Libya to Sri Lanka.
Business Standard 12.04.2001
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