November 29, 2022
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Tea Industry of Bangladesh: Present Status and Future Needs

Tea Industry of Bangladesh

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.

Overview of Tea Industry

Tea cultivation in Bangladesh started during British rule. Although Sylhet division is currently the most famous for tea cultivation. However, the first initiative for tea cultivation in Bangladesh was taken in Chittagong, the country’s port city, between 1828 and 1840. As both attempts failed, in 1854, or to popular belief in 1847, the first commercial tea garden of Bangladesh, ‘Malnichhara Tea Garden,’ was established near current Airport Road in Sylhet.

In East Pakistan, tea was only cultivated in “Surma Valley” in Sylhet district and ‘Halda Valley’ in Chittagong district. During the tenure of Bangabandhu Sheikh Mujibur Rahman as the then Chairman of the Tea Board from 1957 to 1958, the establishment of the head office of the Tea Board in the Motijheel area of ​​Dhaka began. When the country’s tea gardens were destroyed during the war in 1971, the abandoned tea gardens were restored by forming the “Bangladesh Tea Industries Management Committee” or “BTIMC” after independence. In 1973, Bangladesh Tea Research Station was fully converted into a Tea Research Institute, known as Bangladesh Tea Research Institute or BTRI.

According to the Bangladesh Tea Board, there are 167 commercial tea estates and tea gardens in Bangladesh. The total area of ​​these tea estates and tea gardens is 2,79,507 acres (2,79,506.88), where an average of 6 crores 74 lakh kg of tea is produced annually. In 2021, Bangladesh produced the highest ever nine crores, 65 lac kg of tea. In the same year, Bangladesh Globally exported 680,000 kg of tea and earned $180.57 million. Although the amount of internal consumption compared to tea produced in 2021 is unknown, the amount of consumption in 2019 was nine crores fifty-two lac (9,52,00,000) kg, which is increasing at an average rate of 4.61 percent per annum. tea, Bangladesh’s second-largest cash crop after jute, contributing about 1 percent to Bangladesh’s GDP.

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. According to a UNB report published in 2021, the three top tea brands in Bangladesh are Ispahani Mirzapur, KK or Kazi & Kazi, and Fresh Premium Tea. Among them, Kazi & Kazi tea estate produces organic tea and has been promoting Green Tea in Bangladesh. In addition to Kazi & Kazi, several local and foreign brands, including Ispahani, Lipton, Halda Valley, and Finlay, are currently working to popularize several more tea categories. There are currently two auction centers in Bangladesh, where the tea produced is sold to various brands through auctions. One of these centers is Chittagong Auction Center, and the other is Srimangal Auction Center.

Source: tbsnews

Reasons Behind Growth

Favorable Environment

The warm and humid climate of Bangladesh is quite favorable for tea production. In addition, tea plants grow faster when there is more or less rain throughout the year. As a result, the most suitable place for tea cultivation is in hilly areas. Therefore, Bangladesh’s four main hilly regions, Sylhet, Moulvibazar, Habiganj, and Chittagong, have the highest tea production. In addition, the average rainfall in Bangladesh is 203 cm per year, and the average temperature in the country is 26.01 degrees Celsius, making it suitable for tea production. As the environment and climate of Bangladesh are favorable for tea production, besides increasing the country’s tea production, the tea industry is also constantly growing.

Rising Domestic Tea Consumption

Over time, the per capita income of the people of Bangladesh has increased and changed the preferences of the consumer. Besides, the number of middle-class and upper-middle-class people is growing in Bangladesh. As a result, the per capita tea consumption of the people of Bangladesh has reached more than 580 grams, which used to be only 100 grams. 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.

Government Support

The Government of Bangladesh has taken several plans and initiatives to maintain the growth of the tea industry in Bangladesh. As a result, according to the Bangladesh Tea Board, Bangladesh was able to export more than 2.1 million kg (21,70,000) of tea in 2020, and the Bangladesh government intends to increase this to 10 million kilograms by 2025. Bangladesh Tea Board Chairman Major General Md. Ashraful Islam said about the expansion of the tea industry, “The government is helping to develop tea state in areas where tea has never been produced before.”

In addition to the Chattagram Hill Track Area, many projects are being implemented in the country’s northern districts for developing new tea estate. In addition, there are some ongoing projects under which the government is trying to expand them on a large scale by organizing and motivating small-scale tea farmers. Under the schemes, besides providing necessary technical and financial support to these farmers, training is also being provided for their skill development. In addition, a tea-processing factory has been set up in the project area as planned. According to Dr. Nazneen Kawshar Chowdhury, Joint Secretary, Bangladesh Tea Board, Bangladesh’s tea production will reach 140 million kg by 2025 if everything goes as planned.

Current Trends

New Flavor

In general, raw tea, liqueur tea, and milk tea are widely consumed in Bangladesh. Consumption of these two types of tea is most common in almost all places, from small roadside tea stores to big restaurants. However, these tea shops are using different kinds of extra ingredients like Spice, Ginger, Cinnamon, Basil, or Lemon Leaves to add a different flavor to the consumer’s preference for the tea. As a result, consumers are also choosing different flavors of tea. Keeping in mind the consumers’ preferences, the big tea manufacturing companies of the country have also come up with different tastes in their tea. Brands also introduce new flavors by mixing and processing other ingredients with regular tea. Brands like Ispahani, Kazi & Kazi, and Fresh have different tastes, including Black Tea, Lemon Tea, Green Tea, Ginger Tea, Iced Tea, Tulsi Tea, Masala Tea, Amloki Tea, Triphala Tea, Caffeine & Non-Caffeine Tea, and many such new flavors.

Government Pushing for Rising Export

According to The Daily Star, the Bangladesh government plans to increase tea production by 46% to 14 crores kg by 2025. However, Commerce Minister Tipu Munshi said that 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. He said that besides the government, the owners of tea gardens and tea estates should also come forward, and the government would also provide all necessary assistance. He also said in discussion with the 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.

Challenges

Lack of Investment

The major challenge of the tea industry in Bangladesh is the lack of proper investment. A considerable sum of money is required to maintain tea gardens and tea estates to repair factories and machinery, which is not enough in the country’s tea industry. Moreover, even 100-year-old tea gardens need investment to replant new tea seedlings. However, since this tea plant takes 5 to 7 years to grow, most private investors are not interested in investing here, which is hampering the growth of the country’s tea industry.

Global Warming

Another considerable challenge of Bangladesh’s tea industry is global warming. Contaminated weather and excessive heat reduce the yield of tea leaves and drop tea quality. However, Bangladesh receives excellent rainfall from April to October every year, ensuring the yield and quality of tea leaves. However, in recent times due to the effects of global warming, heavy rains in Bangladesh, hailstorms, thunderstorms, occasional droughts, and increased humidity in the air results in low yields of tea. In addition, the time of the year when there is no rain, excessive heat, and dust reduce the plant’s output, hindering the growth of the tea industry in Bangladesh.

Poor Labor & Low Wages 

Another challenge for the tea industry in Bangladesh is the poor condition of laborers and salary allowances. According to a source in ucanews, in 2018, the per capita daily wage of tea workers in Bangladesh was only BDT 102 per head, and they were given only 3 kg rations per week. However, later on in 2019, based on an agreement between tea workers and tea garden owners, the daily wage per capita of tea workers was increased to BDT 117 per head from 1st January that year for the next two years. According to a new age bd source, on June 13th, 2021, a new wage model for these tea workers was fixed at BDT 120 per head for Grade A workers, BDT 116 for Grade B workers, and BDT 116 for Grade C workers, which is much lower than the wages of workers in other labor-intensive industries. In an interview with UCA News, Pankaj Kund, vice-president of the Bangladesh Tea Workers’ Union, said that the wages paid to tea workers are among the lowest in the world. Due to such low wages, tea workers also lose their motivation to work; thus, the quality of tea is not assured.

Low Customer Interest in High Quality Tea

Regular refined and fermented black tea is one of Bangladesh’s most popular and widely used teas. According to the Bangladesh Tea Board, Tea is generally divided into three grades: Broken, Fannings, and Dust. Tea grading is done mainly depending on the condition of the tea leaves. Generally, a whole leaf tea is called the best grade tea. However, Broken Grade FP or Flowery Pekoe tea is of high quality, and therefore its price is high. Although the local demand for tea is very high in Bangladesh, the country’s people are not accustomed to such high-quality tea consumption. As a result, such tea is mainly exported to various countries in Europe and America.

Opportunities

High Local & International Demand

Along with the increasing tea consumption in Bangladesh, global tea consumption is also increasing. In this context, there is a considerable demand for Bangladeshi tea brands in the global market, said the country’s Commerce Minister, Mr. Tipu Munshi. 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.

New Variants

If Bangladeshi brands can produce different variants and flavors of tea besides traditional black tea, then the premium tea sector also has a great potential to grow. Such premium teas can be marketed as gift packages in the domestic market and exported abroad. Compared to ordinary tea, such flavored infused teas are trendy and in demand in western countries. As a result, such premium tea has the potential to be a good export opportunity for Bangladeshi brands.

Skincare Product 

Apart from beverages, tea is also used in skincare and beauty products. Therefore, producing tea-mixed skincare products as a by-product of tea leaves could be a unique opportunity for local brands. This could help create an entirely new industry in Bangladesh based on the tea industry, and Bangladesh could export skincare and beauty products besides tea leaves.

Tea Skin care Products

Tea Cultivation in Flat Land

Although the hilly areas are most suitable for tea cultivation, tea has been cultivated in the plain lands of Bangladesh in the last few years. Especially in the northern region. According to the Bangladesh Tea Board, in 2019, the number of tea estates and tea gardens in the Panchagarh and Thakurgaon districts of the country was only 4859 acres. Still, now tea is being cultivated in 10,170 acres of land in Nilphamari, Dinajpur, and Lalmonirhat, including Panchagarh and Thakurgaon district. Besides, tea can be grown in Mymensingh, Netrokona, Sherpur, Jamalpur, and Tangail. However, tea production has already started in Cox’s Bazar, Bandarban, and Khagrachari. About 12% of the total tea produced in Bangladesh is produced in these flat land tea gardens. Thus, besides the hilly areas, if the amount of tea cultivation in the plain lands can be further increased, Bangladesh’s tea industry will grow further.

Suggestions

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 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.