Traders seek 20pc SD on tea imports
FE Report | Tuesday, 4 March 2014
Tea traders demanded Monday of the government for imposition of a 20 per cent supplementary duty (SD) on import of tea to save the local industry.
A delegation of the Bangladesh Tea Association, led by its Chairman Mohd. Safwan Choudhury, made the demand during its meeting with the Finance Minister AMA Muhith at the latter's Secretariat office.
The businessmen claimed that importers have been importing low quality tea from abroad since 2010, putting a serious threat to the local tea industry.
"The import of tea by Bangladeshi traders increased from 4.13 million kilogram in 2010 to 10.62 million kgs in 2013 for which the prices of local tea have come down significantly," Mr. Safwan told newsmen after the meeting.
He said the country spends a huge amount of foreign currency every year for importing 'low quality' tea, and local tea manufacturers now face an uneven competition because of this.
They informed the minister that the average auction sale of local tea has decreased by 50 per cent as the average sale in the previous year's auction was Tk 274 per kg which decreased to Tk 142 this year.
A huge quantity of tea also remained unsold during this year's auction.
They said neighbouring India imposed 110 per cent SD on imported tea to protect its local industry.
Bangladesh, a country with the tradition of tea plantation, is on the verge of losing its status as a tea-exporting nation.
In 2012, the production of tea exceeded demand by around 1,000 tonnes, with export earnings standing at a paltry Tk 222.3 million, according to the Bangladesh Tea Board.
A bumper harvest of 63.85 million kilograms of tea, the highest for Bangladesh, was achieved in 2012 due to favourable weather and supportive policy measures.
Tea production was 59.13 million kg in 2011 and 59.24 million kg in 2010, according to data from the Bangladesh Tea Research Institute.
There are 160 estates currently producing tea. Although about two thirds of the country's production were being consumed at home previously, local consumption has recently increased and pushed exports down 10 per cent.