Tea export shrinking to near-zero
http://www.thefinancialexpress-bd.com/m ... 2010-10-21
Thursday October 21 2010
CHITTAGONG, October 20: Once a major tea exporting country enjoying a captive export market, Bangladesh is becoming a tea importer with rise in local consumption and sharp fall in production.
The scenario has changed in recent years because of market economy, emergence of new entrants in the world market with low price tea and rapid increase of internal demand.
Major tea business houses like MM Ispahani and Abul Khayer Group of Industries have contacted exporters from Kenya and other countries to buy tea, industry sources said.
"A good quantity of tea has been imported. Tea price in Indian market is lower than ours. So it is being smuggled in," a tea trader said favouring anonymity.
"The buyers are less eager to buy Bangladesh tea as price difference with other exporting countries is much wider. This year only some packet tea has been exported to Middle East countries."
The average export price of tea in Bangladesh was $1.3 per kg in 2007-08, $1.9 in 2008-09, and in June last, it was $ 2.18 per kg, tea traders association statistics said and added that same quality of tea in India and Kenya sells lower.
"We did not import tea as of today but we have contacted Kenya tea exporters," said Mr Wazed, a senior official of tea trader Abul Khayer Group.
"Rapid changes are taking place in international tea price. We have to observe the auction to auction sale situation there. Then we will go for placing orders for supply of tea from abroad," he said.
"The price of tea in Kenya seems favourable compared to that of Bangladesh. Increase in internal demand has pushed up the price in Bangladesh auction although export of our tea has almost come down to zero," he added.
SK Das, a senior official of National Brokers Ltd, a leading auctioneer of Bangladesh tea, told the FE this afternoon that export of Bangladesh tea has dropped due to increase in internal consumption and price as well.
Statistics given by Bangladesh Tea Board show that export of Bangladesh tea in the 2009 was 3.15 million kilograms (kg), which was about 60 per cent less than previous year export of 8.39 million kg.
Export earning was Tk 433.50 million against Tk 976.95 million in the previous year. 75 per cent of the quantity was sold to Pakistan alone.
BTB sources said that the government of Pakistan allowed duty-free entry of ten million kg of tea per year from Bangladesh since October 2002. Bangladesh could not utilize that quota fully as increasing internal demand pushes the price level up in the local auction and discourages export.
Sources said, from export of tea Bangladesh earned $11.26 million in 2005, $6.69 million in 2006, $13.15 million in 2007, $14.29 million in 2008 and $6.34 million in 2009.
Industry sources said that a few years back tea was one of the main export items of the country and Bangladesh tea was favourite in some countries including Pakistan and Russia.
"But the tea production could not keep pace with demand of export due to drought and electricity shortage," a tea trader said favouring anonymity.
"Bangladesh Tea Board took seven-year (August 2003-July 2010) development projects like Small Holding Tea Cultivation in the Chittagong Hill Tracts to supply high yielding variety (HYV), fertilizer, sprayers to small tea growers for cultivation of tea in improved method and other projects but could not implement it," he said.