TEA proposes Tea Board to enter mutual trading agreement with Russia

The Tea Exporters Association (TEA) has called on the Tea Board to explore the possibility of having a mutual trading arrangement with Russia to continue to cater Ceylon Tea to that country.

However, although the federation remains a key market for Ceylon Tea, Sri Lanka is yet to initiate any dialogue with Russia on this matter.
“Since the Russian sanctions may get dragged on for some time, the absence of any acceptable solution to the issue could affect the Ceylon Tea share in the Russian market at least in the short to medium terms,” the TEA said in a statement to the media.

It suggested that the government may also explore the possibility of having a special trading arrangement with Russia to safeguard the important Russian market for Ceylon Tea. “It is a matter of time that Colombo tea auction experiences the heat of Russian sanctions,” the TEA said.

Sri Lanka used to export about 28-30 million kg of tea to Russia and another four million kg of tea to Ukraine annually.

Though there are no sanctions on Ukraine, the export of tea to this country has been affected due to disruptions to shipping and other logistic arrangements. The infrastructure in most parts of Ukraine has been damaged and therefore the retail businesses will not be able to resume operations soon.

The TEA highlighted that the US and EU sanctions on Russia, depreciation of the ruble and curtailing of shipping movements have affected Sri Lanka’s tea exports to this important market.

Media reports have stated that India and Russia have agreed to carry out their trading business using the rupee and ruble.

“This will enable the Indian tea exporters to continue to supply tea to the Russian market at the expense of Sri Lanka and some other suppliers. China and Vietnam, which do not accept the US and EU sanctions on Russia, will also continue with their tea supplies to the Russian market,” the TEA said.