Bangladesh becomes tea importer
Monday, 6 December 2010
Mushir Ahmed
Bangladesh has emerged as an importer of tea as soaring consumption at home and sluggish production have all but ended 150 years of outbound journey for the widely-consumed beverage.
Leading exporter HRC said the company has imported tea from Sri Lanka and Kenya to meet fast-booming domestic demand -- a prospect its chief executive said he had never dreamt in his life.
"Local tea market is growing like anything. We imported tea to boost our domestic sale," HRC group chairman Sayeed Hossain Chowdhury said.
Chowdhury said several other firms have also imported tea this year to cash in on the bonanza that saw tea trade at double the rate at the weekly Chittagong auctions in a span of three years.
Figures released by the Export Promotion Bureau show tea export plunged by 66.47 per cent to a paltry 580,000 dollars in the first four months of the fiscal year.
Top exporters said the shipments were made for the sake of some long-trusted and entrenched customers -- mainly in Pakistan and the Middle East -- who still pine for Bangladeshi green tea.
A senior official of Ispahani Tea, the country's largest and oldest tea trader, said the company exported only 100 kilogram of special brand tea to retailers in Dubai.
"To be honest, it's the end of journey of tea as an export item. Growth in the domestic market is so rapid that we now don't have enough tea to cater to local consumers," he said.
Bengal became a tea exporter in 1850s when indigenous Assam tea saplings were commercially planted in Chnadkhani Hills in Sylhet -- some two decades after British planter Robert Bruce first discovered wild tea bush in upper Assam.
The export almost came to nought after the 1947 partition of the Indian subcontinent when West Pakistanis became the main consumer of tea produced in the then East Pakistan.
"During the Pakistani period, only a few people in Bangladeshi cities would drink tea," said AQI Chowdhury, chief executive officer of James Finley Bangladesh.
"Throughout 1950-60s, Consumption was only 2-3 million kilograms in Bangladesh and the rest 30 million kgs would have been exported to West Pakistan," he said.
The beverage became the third largest foreign exchange earner and a key bulwark against poverty in mid-1970s when the country's 150 plus gardens recovered from the devastation they suffered in 1971 war of liberation.
In late-1990s export topped 40 million dollars before started falling gradually. The decline was steep in the past five years as the beverage became top selling drink in village bazaars and households.
"The fall of tea as an export commodity is both a triumph and loss for the country: triumph, because it reflects how far our economy has treaded since the independence; and loss, because it is no longer a major export earner," said the HRC chief.
James Finley chief said local tea intake has been increasing at a healthy 7-8 per cent rate, slightly beating the country's Gross Domestic Product growth over the past decade.
By contrast, tea production grew a modest 2-3 per cent a year, Chowdhury said, adding local gardens added 10 million kilograms in the past ten years to take total yield to 58 million kgs in 2010.
Early and pre-monsoon drought in the past five years have hit production even though the gardens have for the first time in decades invested tens of millions of dollars in new bushes and irrigation system.
Ever since it was bought by a group of Bangladeshi entrepreneurs in 2005, James Finley, the second largest producer, has invested over 500 million taka to boost production in its 14 gardens.
"Had the weather been kind, we could easily grow 17-18 million kilograms of tea. But prolonged drought in March-June means we are now getting around 11 million kgs. Seven out of ten bushes we planted in the past five years have survived," he said.
Top producer Duncan's -- the British plantation firm which has the highest acreage of tea bushes -- and some other gardens have also clawed back some of their profits to the gardens to scale up yield.
Chowdhury said ownership disputes in dozens of smaller gardens and shrinking productivity at the state-owned National Tea Company, the third largest producer holding eight big-sized gardens, also contributed to tepid production.
With profits soaring in tea trading, some growers have mounted bid to buy or manage some of the disputed gardens now rusted or left fallow in Sylhet, Moulvibazaar and Habiganj districts.
Top growers like Ispahani have tried to manage some firms in exchange for annual management fees.
"The ownership issues of some of the gardens are so complex that the best option to revive them is to take management through renting. That way we can boost production substantially," said a grower.
Bangladesh has emerged as an importer of tea as soaring consumption at home and sluggish production have all but ended 150 years of outbound journey for the widely-consumed beverage.
Leading exporter HRC said the company has imported tea from Sri Lanka and Kenya to meet fast-booming domestic demand -- a prospect its chief executive said he had never dreamt in his life.
"Local tea market is growing like anything. We imported tea to boost our domestic sale," HRC group chairman Sayeed Hossain Chowdhury said.
Chowdhury said several other firms have also imported tea this year to cash in on the bonanza that saw tea trade at double the rate at the weekly Chittagong auctions in a span of three years.
Figures released by the Export Promotion Bureau show tea export plunged by 66.47 per cent to a paltry 580,000 dollars in the first four months of the fiscal year.
Top exporters said the shipments were made for the sake of some long-trusted and entrenched customers -- mainly in Pakistan and the Middle East -- who still pine for Bangladeshi green tea.
A senior official of Ispahani Tea, the country's largest and oldest tea trader, said the company exported only 100 kilogram of special brand tea to retailers in Dubai.
"To be honest, it's the end of journey of tea as an export item. Growth in the domestic market is so rapid that we now don't have enough tea to cater to local consumers," he said.
Bengal became a tea exporter in 1850s when indigenous Assam tea saplings were commercially planted in Chnadkhani Hills in Sylhet -- some two decades after British planter Robert Bruce first discovered wild tea bush in upper Assam.
The export almost came to nought after the 1947 partition of the Indian subcontinent when West Pakistanis became the main consumer of tea produced in the then East Pakistan.
"During the Pakistani period, only a few people in Bangladeshi cities would drink tea," said AQI Chowdhury, chief executive officer of James Finley Bangladesh.
"Throughout 1950-60s, Consumption was only 2-3 million kilograms in Bangladesh and the rest 30 million kgs would have been exported to West Pakistan," he said.
The beverage became the third largest foreign exchange earner and a key bulwark against poverty in mid-1970s when the country's 150 plus gardens recovered from the devastation they suffered in 1971 war of liberation.
In late-1990s export topped 40 million dollars before started falling gradually. The decline was steep in the past five years as the beverage became top selling drink in village bazaars and households.
"The fall of tea as an export commodity is both a triumph and loss for the country: triumph, because it reflects how far our economy has treaded since the independence; and loss, because it is no longer a major export earner," said the HRC chief.
James Finley chief said local tea intake has been increasing at a healthy 7-8 per cent rate, slightly beating the country's Gross Domestic Product growth over the past decade.
By contrast, tea production grew a modest 2-3 per cent a year, Chowdhury said, adding local gardens added 10 million kilograms in the past ten years to take total yield to 58 million kgs in 2010.
Early and pre-monsoon drought in the past five years have hit production even though the gardens have for the first time in decades invested tens of millions of dollars in new bushes and irrigation system.
Ever since it was bought by a group of Bangladeshi entrepreneurs in 2005, James Finley, the second largest producer, has invested over 500 million taka to boost production in its 14 gardens.
"Had the weather been kind, we could easily grow 17-18 million kilograms of tea. But prolonged drought in March-June means we are now getting around 11 million kgs. Seven out of ten bushes we planted in the past five years have survived," he said.
Top producer Duncan's -- the British plantation firm which has the highest acreage of tea bushes -- and some other gardens have also clawed back some of their profits to the gardens to scale up yield.
Chowdhury said ownership disputes in dozens of smaller gardens and shrinking productivity at the state-owned National Tea Company, the third largest producer holding eight big-sized gardens, also contributed to tepid production.
With profits soaring in tea trading, some growers have mounted bid to buy or manage some of the disputed gardens now rusted or left fallow in Sylhet, Moulvibazaar and Habiganj districts.
Top growers like Ispahani have tried to manage some firms in exchange for annual management fees.
"The ownership issues of some of the gardens are so complex that the best option to revive them is to take management through renting. That way we can boost production substantially," said a grower.