So much so, the co-ordination committee formed under the Indo-Russian trade agreement last year is supposed to conduct its next meeting in India.Top industry officials who had been part of the delegation told The Financial Express that the Indian team met the Russian agriculture ministry and discussed various issues to step up trading of this commodity between the two countries.

It may be recalled that an Indian delegation had gone to Russia on July 12, to encourage tea trade between the two countries. The team is said to have put forward certain recommendations to their Russian counterparts to reverse the current trend of falling prices inIndia.

According to sources, the Indian side had asked the Russian government to scale down its physical obstacles in the form of allocation of debt to various individuals and agencies, so that the entire business of tea export was more commercially viable.

Various modalities relating to the LC-denominated trade was discussed. The mechanics of the trade with India have been at a disadavantage to the importers compared to Sri Lanka, another major exporter to Russia. Sri Lanka does not have a LC-backed trade unlike India. It is believed that the Russian importer has to block a 100 per cent margin money with the banks where an LC is being opened for 60 days.

The Russian agricultural ministry apprised the Indian team of the various difficulties of the exchange rate and promised to take into account the Indian industry's suggestions on a host of procedural difficulties.

The Russians were not much forthcoming in reducing duty rates on Indian packets from 20 per cent to 5 per cent at par with bulk teas. Withlarge scale unemployment levels, the Russian counterparts have indicated that the packaging units in the country would provide more employment.

Perhaps the agreement between the Tea Board and Russia, to lift 100 million kilograms from India annually, may not have been a firm commitment but the intention to do so may encourage greater movement of tea between the two countries, felt a few members of the delegation.

Price firms up

Almost coinciding with the India team's visit to Russia, there has been some noticeable buying by the Russians at the south Indian tea auctions over the last two weeks. This has raised prices of orthodox teas by almost Rs 20, and of CTCs by Rs 12. According to an industry observer, this is a redeeming feature but requires to be sustained in order to keep prices firm.

The rise in price levels in south Indian tea prices was witnessed after a long time, which brought solace to the entire market which exports a bulk of its teas to Russia alone. This was particularly aturning point from a drastic curtailment in tea offtake by the Russian buyers at the Indian auctions in recent times which had resulted in a falling trend in prices, felt industry circles.