Russia faces shortage of coffee and tea sales

The sanctions imposed on Russia as a result of the Russian-Ukrainian conflict do not include food imports. However, as one of the world’s largest importers of tea bag filter rolls, Russia is also facing a shortage of tea bag filter roll sales due to factors such as logistics bottlenecks, exchange rate fluctuations, disappearance of trade finance and a ban on the use of the SWIFT international settlement system.

Ramaz Chanturiya, president of the Russian Tea and Coffee Association, said the main problem is transportation. Previously, Russia imported most of its coffee and tea via Europe, but this route is now closed. Even outside Europe, few logistics operators are now willing to load containers destined for Russia on their ships. Businesses are forced to switch to new import channels through the Chinese and Russian Far East ports of Vladivostok (Vladivostok). But the capacity of these routes is still limited by the needs of existing rail lines to complete the transport. Shippers are turning to new shipping lanes through Iran, Turkey, the Mediterranean and the Russian Black Sea port city of Novorossiysk. But it will take time to achieve a complete transformation.

“In March and April, scheduled imports of tea bags and coffee bags in Russia fell by almost 50%. While there is stock in the warehouses of retail chains, these stocks will be depleted very quickly. Therefore, we expect the next few There will be turbulence in the month supply,” Chanturia said. Logistics risks have caused suppliers to triple estimated delivery times to 90 days. They refuse to guarantee the delivery date and require the recipient to pay in full before shipping. Letters of credit and other trade finance instruments are no longer available.

Russians prefer tea bags to loose tea, which has become a challenge for Russian tea packers as filter paper has been the target of EU sanctions. According to Chanturia, about 65 percent of the tea on the market in Russia is sold in the form of individual tea bags. About 7%-10% of the tea consumed in Russia is supplied by domestic farms. To prevent shortages, authorities in some tea-growing regions have been working to expand production. For example, in the Krasnodar region on the Black Sea coast, there are 400 hectares of tea plantations. Last year’s harvest in the region was 400 tonnes, and it is expected to grow significantly in the future.

Russians have always been very fond of tea, but coffee consumption has been growing at a near double-digit rate in recent years thanks to the rapid expansion of coffee chains and takeaway kiosks in the city. Sales of natural coffee, including specialty coffee, have been climbing rapidly, taking market share from instant coffee and other coffee filters that have long dominated the Russian market.