Russia Tea Trade Analysis


Russia Tea Trade Analysis

Russia Tea Trade Analysis

 

Tea was introduced to Russia in the 17th Century and since then the demand for tea is on the rise. Tea is truly the national drink of Russia and is the integral part of everyday routine of most Russians.

Despite repeated claims by some trade experts that Russia is a mature market for tea, it continues to provide opportunities for tea suppliers across the world. Even though Russia internally fulfills a part of the domestic demand by cultivating tea in the Krasnodar region in southern Russia, the country is largely dependent on imports from tea producing nations like India, Sri Lanka & Kenya

Lets look at the trade analysis of the Tea in Russia (Import & Export)

Russia imports most of its tea from India, Sri lanka, China UAE & Vietnam.

As per ITC trade data from 2018, India & Sri Lanka together supply over 54.9% of the total tea exported to Russia.

 

Tea export from India to Russia has seen a consistent growth of 4% in value and 5 % volumes per year from 2014 to 2018** ( Source: ITC Trade Data 2018)

Most of the major tea suppliers dealing in Indian tea have setup their offices in Moscow. Sri Lanka Tea board & Tea board of India , both government bodies, have made lots of efforts to establish awareness of Tea grown in Indian subcontinent.

Kenya also contributes to about 13.2%, whereas China contributes to 9.1% of the total tea exported to Russia **( Source: ITC Trade Data 2018)

Some of the established tea trading houses in Russia are exporting teas from Russia. Some of these are value additions like preparing unique blends of teas, while the rest of the deals are pure re-export.

Kazakhstan, Belarus, Ukraine, Kyrgyzstan, Moldova Republic , Qatar, Azerbaijan and Latvia are the major export markets from Russia **( Source: ITC Trade Data 2018)

Kazakhstan was the largest importer of tea from Russia, contributing to 22.6% of the tea exported by Russia in 2018 followed by Belarus, which contributed to 21.3% of the exports. Ukraine remained at the 3rd spot with 13.8% of the total exports followed by Kyrgyzstan at 6.5%.

Geographical proximity with these CIS nations turns out to be a great advantage for re-export of tea. The total value of the tea exported from Russia was $ 97.92 millions in 2018. This trade has seen a year on year growth of 6% in value and 12% quantity from 2014 to 2018. **( Source: ITC Trade Data 2018)

In terms of type of tea, Black tea continues to dominate the major import of Russia. Organic teas are a new trend emerging in Russian market and the demand for these teas are on the rise. Indian organic green tea is seeing a spike in demand. To summarize, we can comfortably say that despite being an established and mature market for trade of tea, Russia offers an ocean of opportunities to tea suppliers across the world. With consistent growth in import of tea from Indian subcontinent over the past decades, the market projects a great future.

With developing tea culture in other CIS nations like Ukraine, Belarus, Kazakhstan etc there is good opportunity for Russia to reexport and supply teas to these regions with value addition.

 



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