Since the British rule introducing black tea in the region back in 1840, the consumption of tea has never been receded in Bengal, only to be found today as the cheapest drink available in the market or to be part of a luxurious lifestyle as an exclusive brew. A “storm over a tea cup” is ever present in our daily life, may it be dusk or dawn. And the market story behind the scenario is evermore grand and lucrative one. Standing as the producer of 2% of total world production, Bangladesh is now on the brink of new export opportunities in this sector.
Types of Tea
Bangladesh has a long history of producing CTC (Cut, Tear, Curl) black tea. But in recent decades, the industry has also started producing green and oolong tea, introducing new tastes and blends for the local as well as global consumers. Traditionally the local consumers are accustomed to the black tea which is fully fermented and more oxidized than other kinds. The most popular preparation supplements are milk, molasses, ginger, lemon and mint along with the newer additions like satkora, malta, tamarind, chilli etc. Regardless of the choices, the demand of black tea is forever high.
But as the standard of life is changing, people are opting for more changes. Green tea is gaining popularity rapidly among the health-conscious community. Green tea is non-fermented and has a subtler, delicate flavor for the ones wishing to enjoy a refreshing touch. It is also rich in medicinal properties. Therefore, the consumption of green tea has increased notably among the recent years. The most recent addition in the list is ‘White tea’. White tea comes from the buds of the tea plant and is very lightly fermented-processed. Considering these aspects, the industry has moved to value addition of tea.
The major number of tea estates and gardens are located in the hilly districts of Bangladesh e.g. Sylhet, Moulvibazar and Habigonj which are located closer to Assam of India. The first commercial cultivation of tea in Bangladesh started at Malnicharra Estate in 1857 in Sylhet. Next to Sylhet, Chattogram is the largest tea producing area of Bangladesh. Opposite to the popular belief that rainy and hilly areas are only suitable for tea gardens, a large number of gardens has been set up and thriving in the dry land of Panchagarh district of north-Bengal. Tea cultivation initiated in Panchagarh in 2001 A.D and within short period of time 8 tea gardens are established in that area. One of eight gardens is producing organic tea with high quality and some of them have started exporting in different countries including in U.K and U.S.A. Apart from this area Halda Valley Tea garden is the highest yielding tea garden per hector situated in Fatikchari, Chittagong.
An Important Cash Crop
The country has 166 tea gardens including 129 full-fledged estates covering over 279,439 acres of land and listed as the 9th largest tea producer in the world. Bangladesh produced about 79 million kg in the FY 2016-2017 against the domestic demand of 86 million kg. To meet this demand about 6.98 million kg tea was imported from foreign countries in 2017. On the other hand, Bangladesh earned $4.7 million from exporting premium tea products in the fiscal year, whereas it earned $1.83 million in the previous fiscal. The statistics clearly indicate the need for expanding tea cultivation area, innovation and research. According to statistics of Bangladesh Tea Board, total tea production in 2018 was 82.13 million kg and ranked 9th among the tea producing countries of the world.
For the last ten years the domestic production of tea has hardly met the consumption amount. In 2008 the export was 8.39 million kg worth of 976.95 million BDT making the highest mark in the past ten years. But as the consumption of tea is greater than the production, the market in also dependent on importing from foreign sources to fulfill the national demand. In 2018 the production target was set for 72 million kg however it was produced more than 82 million kg.
In domestic market, tea is sold either through direct sales or through auction. The tea estates can sell 15% to 20% of total production in the local market. The rest of the sales are generated through tea auction market in Chattogram & Sreemangal. The auction was established back in 1949 by British and Australian traders. Currently the auction center is established in the international scene along with the local market. The new weekly auction system has generated much interest among the buyers. Recently the market has experienced a price increase of 31% from April 2018. This increase in the market price is mostly due to factors of high domestic demand, improved quality production and lower production. Moreover, as the import duty on processed tea was reduced by government on 2010, importing foreign tea has been on the rise since 2011. As a result, the prices are unstable in local market.
The demand of tea is increasing rapidly worldwide in recent years. Value added variations and organic tea is taking up the international market creating a great window of opportunity for Bangladesh for its premium quality tea in European Union, US, Middle East, Asian countries specially in Pakistan, Afghanistan even in the birth country of tea China. Large corporate groups investing in the industry promoting different variations of production is therefore taking the lead in the tea export business. The nine companies exporting Bangladeshi tea worldwide are- The Consolidated Tea & Lands Co. (BD) Ltd., Abul Khair Consumer Products Ltd., Halda Valley Tea Estate Ltd., Kazi & Kazi Tea Estate Ltd., Haji Ahmad Brothers, M. M. Ispahani Ltd., Shaw Wallace Bangladesh Ltd., Monir Shah & Sons (Pvt) Ltd., Meghna Tea Company Ltd.
Though the export potential is huge for Bangladesh in foreign markets, other tea producing countries like India, Sri Lanka, Indonesia, Vietnam and Kenya advantages to supply better quality teas at lower prices as tea prices are relatively high in domestic market for forever increasing demand. As a result, the export market is extremely competitive for Bangladeshi tea.