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Assignment On Tea Export in Bangladesh
Assignment On Tea Export in Bangladesh
Assessing
Export Trend and BOT of Tea
in Bangladesh
Submitted To:
Dr. Md. Akhtaruzzaman Khan
Professor
Department of Agricultural Finance and Banking
Bangladesh Agricultural University, Mymensingh.
Submitted By:
Name: Nishat Tasnia
Roll No.: 22180102, Reg. No.: 53988
Session: 2022-2023
Institute of Agribusiness and Development Studies.
Bangladesh Agricultural University, Mymensingh.
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Table of content
Content Page No.
Introduction 03
Origin of Tea Industry 03
Tea Industry in Bangladesh 03-04
Tea Production 05
Domestic Tea Consumption 06-07
Tea Export Trend 07-08
Tea Import Trend 08-09
Balance of Trade 09-11
Tea Export Policy of Bangladesh Government 11
Conclusion 11-12
Reference 12
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Introduction
Tea is the second largest cash crop in Bangladesh after jute. From breakfast to evening chat,
tea has been a favorite drink of this country’s people all day long. Apart from Bangladesh, tea
is most prevalent in countries like India, China, Japan, and the United Kingdom. Due to this,
tea has been produced in Bangladesh for more than 180 years. At present, there are 167
commercial Tea Production Estates and Tea Gardens on 2,79,507.88 acres of land in
Bangladesh, employing about 1.5 lakh workers. In addition, 3% of global tea is produced in
Bangladesh. In 2021, the market size of the tea industry in Bangladesh was about BDT 3500
crore.
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Category B: The Bangladeshi government, Bangladeshi tea companies or Bangladeshi
individuals own this category of estates.
Category C: The family owned small and low productive estates belong to this category. Wages
and working conditions are at their worst in the tea estates under this category.
Currently, there are five types of tea produced in Bangladesh: Green Tea, Black Tea, Oolong
Tea, Instant Tea, and White Tea. According to the Bangladesh Tea Board, Abul Khair
Consumer Products Ltd is in the top position among the six leading companies in Bangladesh
in tea exports. In addition, Kazi & Kazi Tea Estate Ltd., Halda Valley Food & Beverage Ltd.,
and M.M. Ispahani Limited are ranked second, third and fourth, respectively, and Meghna Tea
Company is fifth, and The Consolidated Tea & Lands Co. (BD) Ltd is at sixth position.
Local tea brands dominate the domestic market with a 75 per cent share while non-branded
producers account for the rest.
Top brands of tea in Bangladesh leading local tea quality:
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Tea Production
Bangladesh is a growing tea producing nation in Asia. Production of tea in Bangladesh
registered steady growth rising from 39.81 million kg in 1980 to 96.506 million kg in 2021.
Figure: Tea production of Bangladesh (in million kg). (Source: Bangladesh Tea Board)
The world production of tea has increased tremendously over the last 50 years. It is interesting
to note that the production increases in the major tea producing countries have been due to
large increase in the yield per hectare. But Bangladesh yield rate in per hectare is apparently
much lower than other countries. In the nineties, the yield per hectare in India was around 1500
kg, in Sri Lanka this was 1600 kg and in Bangladesh it was only 1000 kg.
Figure: Percentage share of world tea by major tea producing countries in 2021. (Source: ITC)
According to the Bangladesh Tea Association, the 167 tea estates in the country cover almost
280,000 acres of land. Bangladesh is currently listed as the world's ninth largest tea producer,
accounting for around 2 per cent of the world's total production.
In addition, 90 of the tea gardens are currently in Moulvibazar, which accounts for 55 per cent
of the tea produced in the country. Habiganj is the second largest producing district,
contributing 22 percent.
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Figure: Tea production in Bangladesh. (Source: Bangladesh Tea Board)
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Besides, another reason is that local prices are comparatively better compared to that of the
international market. The Tea Traders Association of Bangladesh, claimed local consumption
rises by 6-7 per cent every year and if domestic production cannot cope, then tea would have
to be imported to make up for the dearth in supply. Large amounts of tea go up for auction at
the end of each harvesting season but nothing remains unsold, meaning that exports can only
increase when there is surplus in production. Conversely, if there was a lot of tea left over after
catering to local demand and it is not exported, then that would be a matter of concern.
Figure: Tea export value from Bangladesh (in million $). (Source: Bangladesh Tea Board)
Tea is sold in two ways.
• Direct sell from the Estate.
• Auction
A tea estate can sell 15-20% of total production in the local market. Generally, tea is sold in
the only tea auction market in Chittagong on every Tuesday. The participants involved in the
tea marketing system are the tea estates, brokers, bidders, blenders, wholesalers and retailers.
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Figure: Export value of tea from Bangladesh 2012- 2021 (in million BDT). Source: The Daily Star
In addition, in 2020, Bangladesh exported 21,70,000 kg of tea to 22 countries worldwide, which
is about 260 percent more than the previous year. Although Bangladesh cannot export a
sufficient quantity of tea after meeting the local demand, if production is increased, there is a
possibility of earning more foreign revenues through tea export in the future.
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Figure: Import and Export value of tea of Bangladesh. (Source: Bangladesh Tea Board)
According to an estimate, by 2025, the local demand for tea in Bangladesh will be around 13
crores (12,90,000,000) kg. Therefore, if it is possible to produce 14 crores kg of tea, it will be
possible to export another one crore kg of tea after meeting the local demand.
According to the Bangladesh Tea Board, in 2019, 99% of the tea produced in Bangladesh was
consumed locally. However, according to a source, in 2021, 6 lakh 256 thousand kg of tea was
imported as well. In addition to the changing preferences and purchasing power raising
awareness among the people about different health benefits of different types of tea, the
domestic consumption of tea has also increased, which is one of the reasons for the growth of
the tea industry in Bangladesh.
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EXPORTS IMPORTS
In 2020, In 2020,
Bangladesh exported $4.33M in Tea, Bangladesh imported $925k in Tea,
making it the 56th largest exporter of Tea in becoming the 149th largest importer
the world. of Tea in the world.
At the same year, Tea was the 133rd most At the same year, Tea was the 822nd most
exported product in Bangladesh. imported product in Bangladesh.
The main destination of Tea exports Bangladesh imports Tea primarily from:
from Bangladesh are:
Kenya ($391k),
Pakistan ($2.27M),
India ($128k),
United Arab Emirates ($1.15M),
Singapore ($126k),
United States ($625k),
China ($111k),
Kuwait ($67k),
United Arab Emirates ($94.4k).
Canada ($63.5k).
The fastest growing import markets
The fastest growing export markets in Tea for Bangladesh between 2019 and
for Tea of Bangladesh between 2019 and 2020 were Singapore ($109k), United
2020 were Pakistan ($1.65M), United Arab States ($6.87k), and Poland ($1.51k).
Emirates ($144k), and Canada ($28.6k).
Figure: Balance of Trade value of tea in Bangladesh (in million kg); 2017- 2021.
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As following to figure, the value of Balance of trade in 2017, 2018,2019 and 2020 was
remained negative balance of trade known as "trade deficit" (import more than export); In
2021, the value of balance of trade is positive balance of trade is Known as "trade surplus"
(export more than import).
According to The Daily Star, the Bangladesh government plans to increase tea production by
46% to 14 crores kg by 2025. However, despite the increase in tea production in Bangladesh
as per the demand, it is still challenging to export tea abroad after meeting the need of the
people of the country. However, efforts are being made to increase tea production and exports.
besides the government, the owners of tea gardens and tea estates should also come forward,
and the government would also provide all necessary assistance Bangladesh Tea Board that
besides proper marketing for the development of the tea industry, the Bangladesh government
is constantly working to establish new tea gardens, innovate new variants of tea, and ensure
fair prices. According to an estimate, by 2025, the local demand for tea in Bangladesh will be
around 13 crores (12,90,000,000) kg. Therefore, if it is possible to produce 14 crores kg of tea,
it will be possible to export another one crore kg of tea after meeting the local demand.
Conclusion
While tea production in Bangladesh increased, the export did not. In 2001 Bangladesh exported
more than One crore 20 lac kg of tea abroad; in 2010, it decreased to just over 9 lakh kg, and
in 2021 it further reduced to only 680,000 kilograms. In the past, a large amount of foreign
exchange could be earned from Bangladesh’s tea export, but now the picture is entirely
different. According to worldstopexports, Bangladesh is currently ranked 57th in global
exports. Therefore, if Bangladesh wants to capture the global market, it must produce more tea
than the local demand. As local demand continues to increase, it is essential to prepare the lands
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where tea has not been cultivated before to make it suitable for cultivation and increase tea
exports, especially on flat lands in several other districts like Panchagarh Tetulia and
Thakurgaon in North Bengal. This will increase the production to export additional tea after
meeting the local demand. In addition, if the volume of production increases, it will not be
necessary to import tea from other countries to meet the local demand.
Since tea plants cannot survive in high humidity, Bangladesh does not receive adequate rainfall
during most of the year due to adverse weather conditions. Therefore, modern and artificial
irrigation arrangements must be made to overcome such conditions. This will make it possible
to continue tea cultivation even in the dry season. Additionally, tea trees are grown on mountain
slopes in hilly areas so that water doesn’t stick to their trunks. Therefore, in places where tea
is cultivated or cultivated on flatlands, an adequate drainage system should be ensured to
remove irrigation water or rainwater.
Moreover, machinery used after collecting tea leaves from the tree in various processes can be
further modernized. In addition, several hilly areas of the country remain uncultivated.
Therefore, tear production can be further increased if these uncultivated areas are suitable for
tea cultivation. Moreover, tea is still cultivated and produced in Bangladesh following the then
British culture, which is much more important to modernize. Therefore, modernization of tea
cultivation will increase production, and the rest can be exported by meeting local demand. In
addition, the tea industry employs a large number of people. To provide these workers with fair
wages and adequate facilities, the government has to take the necessary steps along with the
owners of tea gardens and tea estates. If all these issues are implemented, Bangladesh’s tea
industry will become more self-sufficient in the future.
Reference
http://en.banglapedia.org/index.php?title=Tea_Industry
http://baltimorepostexaminer.com/as-bangladesh-loses-status-as major-tea-exporter-rural-tea-
pluckers-have-few\ options/2021/12/31.
https://en.wikipedia.org/wiki/Tea_production_in_Bangladesh Bangladesh Tea Board (2022),
Monthly Statistical Bulletin.
Bangladesh Bureau of Statistics (2021), Statistical Yearbook of Bangladesh. Khalid, A.B.M.
(1975), "Some Problems of the Tea Industry in Post Liberation Bangladesh", The Dhaka
University Studies, Vol. 23 (Part A), 61-82.
The Daily Star reports. Tea production expands but exports decline, published on
Friday, October 21, 2022.
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