ECONOMYNEXT – Sri Lankan tea brands are losing their share of the tea market in Russia, one of the main buyers of Ceylon tea, a brokerage has warned, noting that crude oil prices will have an impact on demand.
“Sri Lankan brands have lost share and domestic brands are gaining ground,” Asia Siyaka Commodities said in a report.
It said that Russia’s World Trade Organisation obligations to Sri Lanka on duty reductions on value added teas had been met by end-2016.
“This will offer some respite to Sri Lankan brands but could be largely negated by high auction prices and low supply,” the brokers said.
It noted that in Russia legislation to control supermarkets and rising retail prices is in place.
“Outcomes are not clear as the strengthening of the rouble would have helped. The strength of the currency will depend on crude oil prices and continuing sanctions.”
(COLOMBO, Jan 14, 2016)