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Russian tea market stable as Kenyan growers bemoan low prices


MOSCOW, Oct 15 (Reuters): Tea consumption in Russia will remain stable in the foreseeable future, but the share of more expensive brands and fruit-flavoured and herbal teas will rise, industry officials said yesterday.
"Since 1997 tea consumption in Russia has stayed within a range of 150,000-160,000 tonnes," Ramaz Chanturiya, the head of Rusteacoffee industry lobby told a tea seminar.
"The volume of the market rose to 166,000 tonnes in 2004. But we cannot say that we are witnessing a serious change. We have serious doubts that there will be a further rise."
Last year 93 percent of all tea consumed in Russia was black tea, Chanturiya said. Sri Lanka, India, India, Indonesia, China, Kenya and Vietnam accounted for 95 percent of imports.
The average price of imported tea, however, rose to $1.82 per kilo in the first quarter of this year from $1.69 in 2004 and $1.43 in 2003. The value of the market rose to $1 billion in 2004 from $800 million in 2003.
"The increase results from rising consumption of more expensive and better quality teas, and also from higher share of teabags," Chanturiya said.
"Exports to the Commonwealth of Independent States doubled last year to 6,000 tonnes, and I think there will also be a serious increase in 2005," he said.
The share of non-traditional teas in Russia has been rising in the last years and producers expect this process to continue, Vyatcheslav Malinka, general director of Krasnogorskleksredstva producer of medicinal, fruit-flavoured and herbal teas, told the seminar.
He said that the volume of traditional black tea consumed in Russia in 2004 declined by two percent to 138,000 tonnes from 141,000 tonnes in 2003.
At the same time consumption of black tea containing herbs, fruit and flavours rose by 19 percent to 8,200 tonnes from 6,900 tonnes, flavoured and non-flavoured green tea by 11 percent to 10,000 tonnes from 9,000, herbal and fruit teas by 13 percent to 3,500 tonnes from 3,100 tonnes.
Another report from Nairobi says: Kenya's tea producers are threatened by falling prices because of a tea glut in the world market, making it hard to meet rising production costs, a tea official said.
David Mugambi, chairman of the umbrella group East Africa Tea Trade Association, said production costs were now on par with returns.
Industry regulator Tea Board of Kenya (TBK) says the average production cost for a kg of tea in Kenya was approaching $1, while the average price has stagnated at $1.54 per kg between 1995 and August 2005.
The U.N. Food and Agriculture Agency, FAO, says tea prices have proved to be among the most stable in agricultural commodities, falling just 2 percent between 1993/1995 and 2001/2003, compared with falls of 39 percent for cocoa and 38 percent for coffee.