Tea growers struggle to keep up supply
Growers now struggle to maintain supply of tea in line with its growing demand, which ultimately pushes the beverage price up.
Tea is widely consumed nowadays, from urban to rural areas, with around 7 percent domestic growth a year, says a senior official of the Tea Traders Association of Bangladesh (TTAB).
According to the trade body, around 55 million kilograms (kg) of tea is the annual domestic demand against the total output of 58 million kg. A demand-supply gap has been created because around 4.5 million kg are exported.
The country produced only 0.87 million kg up to March against the target of 59 million kg for 2009, Bangladesh Tea Board (BTB) data showed.
It further showed that total tea production was 58.75 million kg in 2008, 57.95 million kg in 2007 and 53.40 million kg in 2006.
"We need a total production of 65 million kg at the moment to meet domestic and export demands for the item. Otherwise, we have to import tea rather than export," the TTAB official said.
Export Promotion Bureau (EPB) says Bangladesh exported tea worth $11.71 million in July-March of the outgoing fiscal year against a target of $11.87 million. The annual export target of tea has been fixed at $16.38 million for FY 2008-09.
During 1978-2007, tea crop yield marked a 35 percent rise. In the same period, major tea growers like James Finlay Ltd increased production by 44 percent, Duncan Brothers (BD) Ltd 48 percent and MM Ispahani Ltd 85 percent, industry insiders said.
However, tea production by the state-owned National Tea Company Ltd (NTCL) tea estates declined sharply on a year-on-year basis, due to corruption, mismanagement and fund constraints.
Over the last few years, political party stalwarts have been tipped as the NTCL head, but mismanagement and corruption became the order of the day.
NTCL tea production stood at 44,43,517 kg in 2008, 42,55,063 kg in 2007, dropping from 47,65,668 kg in 2006 and 56,21,856 kg in 2005, according to M Naufel Karim Khan, the NTCL secretary.
Denying any corruption and mismanagement, the company secretary identified fund constraints as the main obstacle to growth.
Khan said NTCL could not even re-plant the required 2.5 percent of tea plants every year because of such fund constraints. "No new plantation was done since 1978."
Furthermore, NTCL had to use high priced fertilisers and pesticides to yield from the old trees in the company's 12 tea estates.
Khan attributed the low output in the tea growing regions in the last two years to draught.
To raise production, he said, the NTCL Board of Directors approved a 10 yearlong development project worth Tk 146 crore this year.
NTCL, a public limited company, was formed with 51 percent shares vested in the government. The government presently owns 54 percent of shares and the private sector 46 percent shares of the 6,60,000 shares. The face value of each share is Tk 100.
The company started operations with nine estates, which were declared abandoned by the government. These 9 estates were the finest of the approximately 42 estates that were taken over by the Bangladesh Tea Industry Management Committee in the post-liberation period.
The tea gardeners were in favour of private management for NTCL, to improve management, production and maintain quality in the interest of meeting growing demand in domestic and export markets.