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The Financial Express

Revitalising tea export

Published: September 15, 2016 20:04:52 | Updated: October 24, 2017 20:27:10


Revitalising tea export

 

Bangladesh produced record quantity of tea last year. The Tea Board suggests that the way things are moving, production this year is expected to beat that record too. Rise of production in any sector is good news - and more so in this case as tea production started declining from about a decade ago due to certain complications. During the dull period, domestic demand of tea outstripped the declining production and made Bangladesh, once its major exporter, a net importer. Tea had to be imported to meet the increasing demand at home. The authorities then took certain measures and production of tea started rising again, and reached a record 67.38 million kg in 2015. The amount  may exceed  70 million kg this year, according to experts.
The country has over 56,846 hectares of land under tea cultivation and 172 commercial tea estates. The industry accounts for 3.0 per cent of global tea production and employs more than 0.4 million people of which nearly 75 per cent are women.
Once tea was the second major foreign exchange earner of the country after jute and the export markets included USA, UK, France, Switzerland, Kuwait, Oman, Sudan, Pakistan, India, Poland, Russia, Iran, Afghanistan, Kazakhstan, Uzbekistan, Belgium. The industry accounts for 1.0 per cent of gross domestic product (GDP).
Tea is grown in the northern and eastern districts of the country. The highlands, temperate climate, humidity and heavy rainfall in these districts provide an ideal climate for production of high-quality tea. The government has also begun to promote small-scale tea growers, particularly in the Chittagong Hill Tracts in a bid to expand the tea growing areas of the country.
Tea being one of the most important non-alcoholic beverage drinks worldwide has been gaining further popularity as an important 'health drink' in view of its purported medicinal value. It is served as morning drink for nearly two-thirds of the world population everyday.
Tea had been one of the major contributors to our national exchequer for a long time. But the industry is confronted with a multitude of problems like lack of capital and modern machinery, lower market value, lower yield per hectare and lack of lack of adequate source of water for irrigation throughout the year. In addition, lack of medical facilities for labour and lack of infrastructure (road, quarter, water supply network etc) are some of the other major constraints.
These problems need to be addressed seriously. The government undertook some policy initiatives and tried to revive the sector that brought some success, but much remains to be done to fully revitalise the tea sector.
Infrastructure is still inadequate. The tax system is too complex, with too many taxes and rates that are too high.
And trade policy needs to be revised to allow imports of made tea and exports of green leaf.
In addition, there has been a phenomenal rise in domestic consumption due to swelling urban population and emergence of a burgeoning middle class. The increasing local demand led to the growth of a lucrative domestic market that attracted new investment in production and marketing of tea. Local conglomerates have come forward with huge investment, bought new lands and set up new gardens.
These investor, along with some multinationals who were already in the business for nearly a century, not only arrested the decline in production but pushed production to a new height. Bangladesh lost edge in tea exports mainly due to increasing domestic consumption that takes up around 90 per cent of its annual production.
Total domestic consumption is around 50 million kilograms. Industry insiders believe that Bangladesh will require to import tea for next five to six years if the current pace of internal consumption continues.
Bangladesh used to export up to 90 per cent of its total yield to Pakistan, Afghanistan, former USSR (Union of Soviet Socialist Republics), Iraq, Iran, Jordan, Sudan, Kuwait, Bahrain and the United Arab Emirates even during the period between 1985 and 1990. But domestic consumption increased so much in the last five years that the country could export only five to six million kg. As a result, most previous importing countries lost interest in Bangladeshi tea, and export market squeezed down to three countries - Pakistan and Kazakhstan and Uzbekistan.
Apart from the problems facing the tea industry as mentioned above, there are some other factors that work as deterrent for growth of production to the desired level.
These include, among others, low hectare-wise production, lack of development initiatives and replacement of century-old saplings.
Bangladesh is lagging behind in hectare-wise production of tea, compared to major tea producing and exporting countries such as Sri Lanka, India, China and Kenya according to Tea Traders Association of Bangladesh.
After a period of continuously declining production, record high yield last year is however a welcome change in the overall scenario in more senses than one. On one hand, it is a great leap forward towards attaining self-sufficiency in tea production and a big stride towards resuscitation of life in tea export.
saleh.akram26@gmail.com

 

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