According to reports received from state-owned Bangladesh Tea Board (BTB), annual domestic tea consumption increased to about 40 million kg, up from 20 million kg ten years ago.

Tea exports in the fiscal 2003-04 stood at 12.46 million kg, down from 26.22 million kg ten years back.

"Lately our domestic market is picking up as more people are developing the habit of drinking tea. This is the only drink which we find cheaper in our country," said Rasul Nizam, managing director of a leading tea brokerage house.

"As a result our tea growers and traders are now focusing on domestic market, Nizam said.

He said two-third of tea produced in India is also consumed locally, adding that the internal demand of Bangladesh tea market is expected to go higher in line with the pace of urbanisation.

Ten years back Bangladesh used to export tea to 25 countries but now the tea is exported to Pakistan, Afghanistan and the CIS countries, sources said.

Most of the traditional buyers of Bangladesh tea now buy tea from Kenya, Rwanda, Burundi, Malawi and India due to low price there, they added.

According to market reports, 20.4 million kg of tea were sold in the first 20 weekly auctions held in the current season, of which 11 million kg were purchased for the home market and the rest 9.4 million kg for exports.

KM Iqbal, deputy general manager of James Finlay Ltd, said: "We produce 12 million kg of tea annually in our 20 tea gardens. But of that we sell 10 million kg in the internal market while rest 2 million kg are exported."

Iqbal said producers prefer to sell tea in domestic market due to cumbersome documentation processes involved in tea exports.

Feroz Ahmed, chairman of Tea Traders Association of Bangladesh (TTAB), said: "Shipping problem as well as increase in freight costs are posing threat to our Bangladesh tea exports.”