STiR coffee and tea magazine

60 STiR coffee and tea / Issue 4, 2021 (August / September) A By Eugene Gerden Tea under snow in Krasnodar region, the center of Russian tea industry. Traditional Russian samovar at a tea expo in the Tula region. s the consumption of tea in Russia gradually declines due to a switch of consumers to coffee and other hot beverages, Russia may lose its status as one of the world's major tea-drinking nations, according to recent statements made by representatives of some leading local producers and analysts. However, one door starts to shut and another opens. Over the past few years, Russian tea manufacturers turned to export markets. Due to rouble devaluation over recent years makes the prospect for exports more profitable than supplying the domestic market. Russia never ranked in the top tier of major tea producers, but its tea exports have steadily grown since 2018 mainly from a significant increase of domestic production – primarily in the southern provinces of the country -- and the growth of demand for Russian tea in neighboring states. The Krasnodar region, which is part of North Caucasus is the center of tea production in Russia. Analysts predict that the region will become even more important to the Russian tea industry in years to come. Over the past few years, a significant part of tea output from the Krasnodar region in ad- dition to domestic market, is now supplied to foreign markets while the list of major importers of Russian tea significantly expanded in recent months. In fact, the growth of exports is part of the plans of the Russian government to significantly increase exports of its tea within the next several years. So far, there has been some progress. According to data of Agroexport Center, an analytical and operational center responsible for agricultural ex- ports, tea exports from Russia grew 3.4% to 21,000 tonnes in volume terms. In value terms, the total sales were US$106 million (up +2.1%). The biggest growth observed was in green tea, with deliveries growing by 19% to 3,100 tonnes. At the same time black tea exports amounted to 17,000 tonnes valued at US$89 million, which is 1% higher 2019. Primary importers of Russia tea are nearby states such as Belarus, Kazakh- stan, and Ukraine, but there are also sizeable exports to Israel, Qatar, Latvia, and Germany. According to preliminary data from the Russian federal tax service, the growth of tea exports from Russia continues in 2021. According to its data, tea exports grew by 44% year-on-year in the first months of 2021. In addition to tea growing itself, Russia is a successful tea packer/proces- sor and has several large-scale tea processing facilities. Thanks to this, as well as a well-established logistics system, Russian tea processors significantly increased its share in the global market. Russia: Less Domestic Consumption Leads to Growing Exports Analysts expect exports of tea from Russia, including in its processed form, will continue to grow in years to come, that will be also due to the ever-growing demand for it at foreign markets and the ability of local producers to supply it at com- petitive prices. So far, a number of leading Rus- sian tea manufacturers (along with global com- panies, operating in the local market) announced their plans to increase their exports and diversify of supplies in years to come. Most of producers and analysts, however, do not believe in the ability of Russia to secure a big share of global market with its own-grown tea in the short-term, putting the biggest hopes on the exports of processed tea. Still, despite the ever-developing domestic production, Russia's dependence from tea im- ports remains high. According to data of the Rus- sia federal customs service, the annual tea imports to the country are currently varied in the range of 300,000-320,000 tonnes, while the list of major suppliers consists of India, Sri Lanka, and Kenya. Analysts expect that the consumption of tea in Russia will tend to decline in the short-term, as Russia can no longer be considered the tea-drink- ing nation it was in the past. Ramaz Chanturia, head of the Russian As- sociation of Tea and Coffee Producers (RusTea- Coffee) told STiR, "We expect that the volume of domestic consumption will slightly decrease, with the volume of exports further increasing and will be mainly observed in case of packaged tea product."

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