Vol. 4 Num 218 Mon. January 05, 2004  
Front Page

Tea in a new brew
Export earnings fall by 60pc, spiking local demand may turn country into an importer

An increasing local demand has resulted in a steep drop in tea exports sparking fears that Bangladesh may soon become a tea importer unless production is enhanced proportionately.

The country's foreign exchange income from tea exports has registered as much as 60 percent decline over the last five years -- from $38.6 million in financial year (FY) 1998-99 to only $15.47 million in FY03, commerce ministry sources said.

Tea exports have always been falling far short of annual targets during the period, which in FY2000 was 56 percent less than the target of $40 million.

In terms of quantity, the fall in exports was around 55 percent over the period. In FY1999, 22.68 million kgs were exported, while the figure went down to 10.35 million kgs in FY03.

"Internal consumption is going up 3.5 percent every year against 1 percent production growth," said SAHM Tauhid, chairman of Bangladesh Tea Board (BTB).

The rising demand for tea at home has triggered stiff competition at the weekly auctions, with local buyers often outbidding exporters and their foreign counterparts.

If the trend continues, Bangladesh which presently is the fifth largest tea exporter in the world may turn into a tea importing country by 2015, BTB officials said.

Portraying a gloomier picture, industry sources said demand for tea at home was going up 10 percent a year and it would not be possible for Bangladesh to have surplus tea for export within only a couple of years.

A multinational company has already started marketing a brand imported from Kenya. "It's a premium brand and selling at Tk 75 per 100 grams," an official of the company said, declining to disclose the quantity of tea it is importing each year.

A local company has also launched another foreign brand, Tetley, in the market, setting up a joint venture between Bangladesh and India.

"But, in our brand we are mostly using local tea, as the cost of the imported one is very high," said an official of the company.

Referring to the dismal in tea production, the BTB chairman said 30 percent of the tea plants were planted during the British regime, the production capacity of which now ranges between 500 and 800 kgs a hactare. "It pulls down the overall productivity.


"If those old plants are replaced by new saplings, the yield will be around 6,000 kg per hactare. That would push the national average level of productivity up to 1,800 kg from the present 1,170 kgs each hactare," he said.

Bangladesh produces about 55 million kgs of tea a year on 119,000 hectares (297,500 acres) of land.

Of the 160 tea estates, 36 are either sick or fall in the 'least developed garden' categories. Although these 36 gardens account for 17 percent of the total tea plantation area, their share in total national production is just 3 percent.

There are also a good number of tea estates that have considerable room for accommodating more plants, sources said.

In a bid to increase tea production, the BTB has been implementing a tea plantation extension programme based on the 'Small Grower Concept (SGC)' in Panchagarh district since 2001. The board is also trying to initiate similar projects in the Chittagong Hill Tracts, Fatikchhari in Chittagong, Mymensingh and some other districts.

"But implementation of the SGC is being seriously hampered due to lack of funds," a BTB official said.

Tea Export For Last Five Years