Kasyanenko has drawn up two different possible scenarios in which the market may develop in future, calling them the optimistic and the pessimistic alternatives, in the back drop of the financial crisis of 1998.

In the last year, following the financial crisis in Russia, CTC tea has gained market at the cost of the Orthodox variety, tea bags, flavoured tea and green teas, on account of lower costs. On the other hand, tea itself gained as some people switched from cocoa and coffee to tea.

After the crisis, imports into the Russian markets from Sri Lanka dipped in a big way and the main gainers were India, Georgia, Bangladesh and China. While Sri Lanka's share fell from 26.2 per cent prior to the crisis to 10.1 per cent following the crisis, India's share rose from 63.8 percent to 73.1 per cent.

In this year, up to June 1999, however, Sri Lanka's share went up to 13.8 per cent while India's share fell marginally to 71.6 per cent.

However, the total Russian tea market grew by around 5 per cent in the first half of 1999, over the volume in the first half of 1998.

Due to the cost sensitiveness of the market the import of packet teas also dropped from 74 per cent of total sales to 55 per cent.

In the optimistic vision provided by Kasyanenko, in the next millennium branded teas would establish a stronger presence in the market and national producers would gain market share. The tea bag segment would expand at the cost of the leaf segment. There would be increased demand for green teas, herbal teas etc. and tea drinking habits will be developed on the basis of "rational choice and preferences".

The pessimistic alternative of Kasyanenko says that the Russian market will be filled with cheap tea and established brands will get counterfeited. Cheap tea will be sold incolourful packs without proper ad-support.

CTC and small leaf segments will demonstrate strength and large leaf and flavoured varieties will lose market share. Decisions will be mainly price driven. Indian tea has almost a 50 per cent share in the other tea markets of the region, namely the other CIS countries. Kasyanenko says that there is great potential for Indian teas especially in Ukraine, Byelorussia and Kazakhstan.

There is a great preference for Indian teas in certain regions of Russia like Western Siberia, Tatarstan and the Far East.