Tea Export Drops, Local Consumption Rises
Wednesday, 16 September 2009

Tea export has fallen drastically as foreign buyers are not participating in international auctions, thanks to, market observers say, rising prices of Bangladeshi tea.

In recent weeks, just 200,000 to 250,000 kilogrammes of tea were exported to the Middle East, while usual buyers from Pakistan, Afghanistan, Tazikistan and Uzbekistan have not been purchasing any tea from Bangladesh.

Around 47,500kg was put on sale in the last auction held on September 8, in which only local buyers participated.

Arifur Rahman Shahin, manager of Purba Bangla Tea Brokers, told bdnews24.com that higher prices of tea discouraged the main importers who purchase tea from Bangladeshi.

Tea importers, he said, have reportedly switched other markets like Kenya where they are getting a competitive price.

Per kg medium quality Bangladeshi tea costs around Tk 146 ($2.13 dollar), excluding VAT, while the same amount of top quality tea is sold at $3.34 dollar, Shahin said.

"The price of Bangladeshi tea rose to Tk 26 per kg in just one year. So the buyers tend to buy better quality tea from other markets like Mombassa in Kenya," he added.

Shehin, however, was optimistic that tea prices will come down soon and then the foreign buyers will return to Bangladeshi tea auctions by March next year when it will be possible to export nearly 5 to 6 million kilogrammes.

In 2007-08, some 6.2 million kg tea had been exported, while the quantity was over 30 million kg during 2003-04.

When contacted, Bangladesh Tea Board deputy director Muzaffar Ahmed declined to comment on the export situation.

Local demand rises

Meanwhile, tea traders and auctioneers said local demand for tea has nearly doubled in last 10 years, but tea production has not increased in proportion, resulting in the price hike.

According to government figure, 10 years ago local demand for tea was 30 percent of total production, whereas nearly 80 percent of total production is now being sold in the local market.

Till July this year, some 23.21 million kg tea has been produced, which is 1 million kg less than the production in corresponding month of last year.

Source: bdnews24.com

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