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Russia keen to expand trade with Sri Lanka

Russia keen to expand trade with Sri Lanka

MOSCOW: The Russian Federation has revealed that its historic longing for Ceylon Tea has not wavered and even vowed for bigger trade with Sri Lanka, calling to dispatch a strong delegation to the trade meet scheduled in Moscow this year, according to Sri Lankan Minister of Industry and Commerce Rishad Bathiudeen.

Russia expressed its keenness to expand its trade relations with Sri Lanka beyond the imports when Russian Ambassador to Sri Lanka Yury Materiy met with Minister Bathiudeen on Tuesday (09) in Colombo. “If we connected Ceylon Tea exports issue with Sri Lankan imports of Russian asbestos as widely speculated, then our tea ban would have to continue even now, isn’t it?” asked Ambassador Materiy.Meeting with the Minister, the Ambassador has asserted that the ban Russia agricultural authorities imposed on Ceylon Tea last month was not due to Sri Lanka’s earlier decision to ban asbestos imports from Russia and it was due to an insect found in one of the tea packages.

“We are not speaking about asbestos in general but only about Russian Chrysotile which is not harmful. Lots of investigations have been done on it. Russian workers who have been working in the chrysotile industry for the last thirty years are doing fine-not one worker was reported to have had cancer in the last thirty years. There are many workers who handle chrysotile in the mines with bare hands, and they are fine. If you decide to import chrysotile from us, we will be very happy,” Materiy said.

According to the Ministry of Industry and Commerce, Sri Lanka has been among the leading buyers of asbestos in the world. In 2015, the four leading asbestos importers in the world were India, Indonesia, China and Sri Lanka (buying from all asbestos exporting countries). Sri Lanka absorbed 6% of global asbestos imports in 2015. According to the Department of Commerce, ‘Iron & steel’, ‘wheat’ and ‘asbestos’ have been the three leading imports from Russia to Sri Lanka in recent years.

Sri Lanka’s recent asbestos imports from Russia has been at low levels and has shown a declining trend -$ 33.87 Million in 2014, $27.92 Million in 2015 and $28.80 Million in 2016. From January to August this year, Sri Lanka’s asbestos imports from Russia was only $ 13.57 Million.

The Russian envoy pointed out that the bilateral trade between both Sri Lanka and Russia is still low and need to be expanded with diversified products.

He said Russia will look forward to the arrival of the Sri Lankan delegation in Moscow to attend the Russia-Lanka Intergovernmental Commission meeting later this year to start a bigger trade.

“We look forward to stronger bilateral cooperation with Sri Lanka including in our assistance. We in Russia like to support Sri Lanka in development cooperation in sectors of energy and agriculture,” Ambassador Materiy said.

Sri Lanka’s total trade (both imports and exports) with the Russian Federation which was at US $ 435.83 Million in 2015 declined to $ 381.71 Million in 2016. This year in the January to August period, it reported a total of US $ 260.78 Million.

Minister Bathiudeen welcoming Ambassador Materiy’s invitation to strengthen trade between the two countries, said Sri Lanka will prepare a strong delegation to Moscow this year so that bigger trade can commence,

The Minister emphasized that Ceylon Tea exports are of high quality and explained that the particular package in question was made of imported packing material and Sri Lankan packing material was not used in it.

“I believe our Gem and Jewellery export are attractive to Russian market and our exporters are eager to explore this potential. We thank Russian support to our development cooperation as well,” said Minister Bathiudeen.

In 2015 Russia was the topmost buyer of Ceylon Tea at $156.65 Million, and the second leading buyer was Turkey. However, in 2016, Russia became the second largest buyer of all types of Ceylon Teas (including green tea made in Sri Lanka) at $ 143 Million while the leading buyer in 2016 was Iran, at $ 154.10 Million.

According to the Department of Commerce, nearly 74% of Sri Lanka’s exports to Russia in 2016 was Ceylon Tea at a value of US $ 143 Million while total exports to Russia in the same year was $ 182 Million. Over the years, total tea exports to Russia has shown a declining trend – $ 240.32 Million in 2013, $ 228.27 Million in 2014, $ 156.65 Million in 2015 and $ 142.55 Million in 2016. Ceylon Tea exports to Russia from January to August this year totaled US $ 114.18 Million (83% of all types of Lankan exports to Russia from January to August 2017).