Russia bans tea, coffee, rice imports from India

Russia’s agricultural watchdog RosSelkhozNadzor has banned imports...

Russia’s agricultural watchdog RosSelkhozNadzor has banned imports of plant products, including rice, tea, coffee and groundnuts from India starting from January 28 after a khapra beetle was found in a shipment of Indian sesame, recently, at a border checkpoint in Novorossisk.

The ban will take a toll on Russia’s tea-packaging factories, which are heavily dependent on Indian supplies, market players warned, saying the prices will increase up to 50 per cent in Russia, within a month, when factories run out of supplies. It is not the first time that kharpa beetle has been found in plant product imports to Russia. RosSelkhozNadzor is planning to hold discussions with the Indian authorities to ensure safe supplies from India.

As India is one of the major tea suppliers to Russia, the ban will be ruinous to the tea, coffee, rice and groundnuts markets in Russia, the country’s news agencies reported. According to Federal Customs Service, 160,000 tonnes of tea worth $1 billion was imported by Russia in 2007, which includes 40,000 tonnes worth $100 million from India.

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India accounts for 8,000 out of every 50,000 tonnes of raw coffee imports. Rice and groundnuts imports are worth $50 million annually. As for sesame, its import is just about 2,000 tonnes ($3 million).

About 95 per cent of Indian tea goes to Russian packers. Bulk tea prices will go up 20-25 per cent unless the ban is lifted soon, experts said, adding a similar rise is forecasted for retail prices. Coffee prices threaten to increase by half.

Even if Russian packers and traders switch to Kenyan or Sri Lankan tea, prices are expected to go up because of political instability in these countries.

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