MOSCOW. (RIA Novosti economic commentator Vlad Grinkevich) - Rosselkhoznadzor, the state agricultural watchdog, announced on January 23 that it would ban plant product imports from India.
This is a very untimely move as the Year of India in Russia has just started, intending to promote bilateral trade and cultural links.
The temporary prohibition, starting on January 28, will concern all plant and vegetable imports after a pest was found in a batch of sesame from India a few days ago. The Khapra beetle (Trogoderma granarium) is a tiny insect 1.6 to 3.2 millimetres long. One of the world's worst stored product pests, it is omnivorous and gobbles everything that comes its way from flour to paper. Its diet includes more than a hundred plants, including rice, barley, rye and nuts. It is amazingly hardy and quickly multiplies.
The beetle has not been found in Russia as of yet, but if it settles here, it threatens losses of 167 million to six billion rubles a year through the destruction of rejected foodstuffs, according to Rosselkhoznadzor estimations.
The prohibition in itself will be ruinous to the tea, coffee, rice and peanut markets. Russia imported 160,000 tons of tea last year-40,000 tons of the total worth $100 million from India, according to Federal Customs Service statistics. India accounts for 8,000 out of every 50,000 tons of raw coffee imports. Rice and peanut imports are $50 million annually. As for sesame, where the emergency started, its import is very small, about 2,000 tons equal to $3 million.
Up to 95% of Indian tea goes to Russian packers. Bulk tea prices will go up 20-25% unless the ban is lifted soon. A similar rise is forecasted for retail prices. Coffee prices threaten to increase by half. Russian food companies have a month's supply of raw tea and coffee; customers will be hard put if the prohibition holds into March.
Even if Russian packers and traders switch to Kenyan or Ceylon tea, prices will go up all the same because of political instability in those countries and the several months needed to get new import routes going, during which tea will acquire scarcity value.
The ban is very untimely considering that the Year of India in Russia, with cultural events galore, and extended economic, scientific and technical, and many other contacts, has just started.
The world regards India among its most lucrative and promising markets. Many European leaders visit the country. As for Russian-Indian trade, it leaves much to be desired, with a turnover slightly below $5 billion. Russian leaders are determined to double it by 2010. This will not be something to take much pride in-suffice it to say that Indian-Chinese turnover will hit the $40 billion mark by that time.
But then, the future might be not as black as it looks now. After all, we have come through many bans. For instance, Rosselkhoznadzor drastically cut rice, peanut and sesame imports from India after several substandard batches came last summer-and the ban was lifted a month later.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
