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SOUTHERN UNIVERSITY

Muhammed Alee Mansur

ID: 026-13-13

Date of Submission September 2006


Program: MBA
“BANGLADESHI TEA IN THE INTERNATIONAL
MARKET”- PROBLEMS AND PROSPECTS

DISSERTATION REPORT
(For the partial fulfillment of the degree of MBA,
in Southern University, Bangladesh, Chittagong Campus)

Prepared for

Dr. Md. Shawquatul Meher


Professor & Chairman, Deptt. of
Marketing
University of Chittagong
And
Faculty Member,
Deptt. of Business Administration
Southern University,
Chittagong.

Prepared By

Muhammed Alee Mansur


ID: 026-13-13
Session: 2004-2006
Program: MBA
Southern University,
Chittagong, Bangladesh

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Acknowledge
ment

It is the Almighty Allah who enabled me to successfully complete the Dissertation “Bangladeshi
Tea in the International Market”- Problems and Prospects. A large number of individuals have
helped directly & indirectly to prepare this report. I am grateful to them.

Especially, I am grateful to my honorable Supervisor Dr. Md. Shawquatul Meher, Professor and
Chairman, Deptt. of Marketing, University of Chittagong and Faculty Member of the Deptt. Of
Business Administration of Southern University, to find some time from his very busy schedule
and give accurate direction about the Dissertation preparation. Without his active co-operation
the preparation of this report couldn’t have been completed.

.................................................
Muhammed Alee Mansur

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Preface

A commerce graduate would rarely find a scope to get familiarized with the practical aspects
before the launching of M.B.A. The authority has opened an opportunity for the students to be
practical oriented through preparation of Thesis paper. It is an essential part for the MBA
student. It provides a chance to acquire knowledge from global business and earmark for new
business executives.

Through study the tea market one can realise the problems and prospects of our tea market
beyond the boundary. As a student of Business Administration I have to gain the analytical
ability through this type of stady, on International tea market. It is tremendous exortion and
challenging for me to complete the thesis on tea marketing, which is fully depending on auction-
based trading system.

Tea holds a special place in the agricultural sector of Bangladesh economy. It is a major cash
crop well as an important export item; it accounts for about 0.81% of the GDP and provides
employment in the country. Marketing system of Bangladesh tea is defined as the process of
sale of manufacture tea in bulk or packed from tea estates to the buyers at Chittagong Auction
or at estates levels from where teas are sold either directly to overseas buyers or internal
traders.

In conclusion, I would like to say that, my effort will become flourishing if any person or
organisation will enrich their knowledge from this report.

____________________
Muhammed Alee Mansur

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DECLARATION

Date: 30.09.2006

To,
Dr. Md. Shawquatul Meher,
Professor & Chairman, Deptt. of Marketing
University of Chittagong
and
Faculty Member of Business Administration
The Southern University, Chittagong.

Subject: Submission of Dissertation on “Bangladeshi Tea in the International


Market”- Problems and Prospects.

Dear Sir:

I am pleased to inform you that I have completed the dissertation in compliance with
your skillful guidance and cordial supervision.

I sincerely believe that the findings of this report will be of immense help to the young
learners for academic reference. For any explanation and clarification of any aspect of
this report I might held responsible. I sincerely hope this report will receive your kind
approval.

Yours Sincerely,

.................................................
Muhammed Alee Mansur
ID: 026-13-13
Session: 2004-2006
Program: MBA
Southern University, Chittagong.

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OBJECTIVES OF THE STUDY

The explicit objective of the study is to fulfill the academic requirements of MBA Program. The

implicit but major purpose is to be familiar with the Bangladeshi Tea and its marketing to

International market. In order to accomplish this objective, the present dissertation covers the

succeeding particular objectives:

1. To highlight the present Market Scenario of Bangladeshi Tea.

2. To examine the prospects of Bangladeshi Tea in the International Market

3. To identify the problems of Bangladeshi Tea Export to the International Market.

4. To know the scenario of World Tea Market.

5. To recommend some corrective measures to resolve the problem.

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METHODOLOGY OF THE STUDY
The word ‘Method’ derives its origin from the Greek word ‘Meta’ and ‘Hodos’ meaning ‘a way ’.A
method involves a process or technique in which various stages or steps of collecting data are
explained and the analytical techniques are defined . According to Urdong, ‘A Method or
Methodology is the underlying principles and rules of organisation of a philosophical system or
inquiry procedure’. A dictionary of Social Sciences observes, ‘methodology is the systematic
and logical study of the principles guiding scientific investigation’ (Gould and Kolb, 1964). In
simple‘a method is the way of doing something’?

This research is an elaborate study to enable us to understand the whole scenario of


Bangladeshi tea to the International market. Collected data and information were tabulated,
processed and analyzed critically in order to make the paper more informative, fruitful and
purposeful.

In preparing this report I have used data and information of the following category:

a) Primary data
b) Secondary data

The primary data had been collected by direct interview & informal discussions with the
important persons of cach department.

Most of the data have been collected from secondary sources. The secondary information is
collected from various books, financial papers, and documents, articles related with the Tea
Plantation, Tea Marketing, Bangladesh Newspapers, Bangladesh Tea Board, Project
Development Unit, BTB, Web portal, Bangladesh Tea Reasearch Institute (BTRI), Tea Traders
Association of Bangladesh, International Tea Boards, EPB, Bangladesh Bank, Board of
Investment, Food and Agricultural Organization (FAO) etc. Annual report, Tea Market
procedures, Tea exports were also consulted and helped to fulfill the objectives of the study.
Preparing the Dissertation on the Bangladeshi Tea Marketing beyond the boundary, all these
primary and secondary data were collected, corrected, organised, analysed and interpreted to
draw some findings.

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SCOPE OF THE STUDY

This report is obviously far from being perfect. Despite of my sincerest endeavor in preparing a

perfect report, some of the limitations were inescapable.

This study is conducted at Bangladesh Tea Board, Export Promotion Bureau, Bangladesh and

Tea Traders Association of Bangladesh, Bangladesh Tea Research Institute (BTRI) to be

acquainted with the real life situations especially with Tea Marketing and its problems and

prospects.

To study the Marketing of Bangladeshi Tea beyond the boundary covering the entire Tea export

procedures, auctions, history and current situation of Bangladesh Tea, its Production, major

competitors, Tea consumptions, World Tea Export is really a vast work. Because of time

constraint the author focused the work from the Bangladesh perspective. This is a major

limitation of this study.

Moreover, the present study is limited to the Bangladesh Tea Board its head office is situated in

Chittagong and their various types of publications.

In spite of these limitations the author tried with all his efforts to know and find out the response
pattern of the subjects and conclusion of relevant record and document. Data have reached a
fairly acceptable degree of accuracy.

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TABLE OF CONTENTS

Sl Contents Page
01 Introduction 10
02 History of Tea 13
03 Tea Scenario of the World 17
04 Tea Production in Bangladesh 26
05 Basic Facts of Bangladesh Tea Industry 28
07 Tea Market Procedure 33
08 Export of Tea 38
09 Black Tea Consumption in the World 45
10 Major Tea Importing Countries from Bangladesh 50
11 Prospects of Basngladeshi Tea in the 55
International Market
12 Bangladesh Tea Market 61
13 Demand for Bangladeshi Tea 63
14 Major Competitors in Tea Market 64
15 Institutions Involved in Tea Sector 71
16 Value Addition in Tea Products 77
17 Tea & Health 78
18 International Tea Market Situation 80
19 Problems relating to Tea Export and Tea Market 87
Expansion
20 Suggestions 103
21 Conclusion 104
22 Bibliography 105

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INTRODUCTION

Tea is processed from the leaves or buds of the tea bush. It is made by steeping the processed
leaves in hot water for a few minutes. The flavour of the raw tea is developed by processing
including oxidation (fermentation), heating, drying or the addition of other herbs, spices, or fruit.
Tea is a natural source of caffeine and theophylline, and has a cooling, slightly bitter and
astringent taste.

Today, tea is the second most consumable beverage in the world after water. A total of
3,200,000 tonnes of tea were produced worldwide in 2004, (Source: FAO website www.fao.org)
India, China, Sri Lanka and Kenya, in that order, are the major producers of tea leaves.

During the pre-liberation period the total tea production was entirely consumed within the
country i.e. the then West and East Pakistan. Soon after liberation, the scenario had been
changed dramatically and the country was left with a surplus which required alternative outlets.
Strenuous efforts were made jointly by the Government, producers and traders to find markets
abroad for Bangladeshi tea. Some of the major tea producing companies began consigning tea
to the London auction, barter agreements were signed with countries like the USSR, Poland,
other East European countries and Egypt against import of capital machinery, chemicals
source. In 1980, a Special Trade Agreement (STA) was signed with Pakistan, as a result of
which export during 1980 was increased to 31 m. kgs i.e. roughly 76% of the total production.
The USSR, Poland, Egypt and Pakistan emerged as major markets for Bangladeshi Tea
(source: Srilankan Tea Board website).

These ‘captive’ markets ensured protection to the industry and whatever, irrespective of quality,
found its way to these markets. The price received for Bangladeshi tea was higher than its
actual value in the open international market. Hence we lost our position as a supplier to those
markets e.g. the U.K. who found alternative sources of similar quality of tea to meet their
demand. There was hardly any effort to improve quality as we were able to sell the quality
product that could be we were producing quite easily. Neither was there much effort made to
run the industry efficiently by investing in inputs to increase yields and reduce costs.

Therefore, when barter and STA’s were withdrawn our tea came into stiff competition with tea
from other origins to gain access to these markets. It was during this period that the Bangladesh

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Tea Rehabilitation Project (BTRP) financed by the ODA was taken up. The project was to help
the industry improve quality and productivity in the existing plantations.

The producers had to think of fresh ways and means to produce the quality required to suit the
need of the export markets. At the same time exporters had to find new strategies to market
their tea against stiff competition from other origins. Most ‘free’ markets had been lost in this
period partly due to the wild fluctuation in prices of our teas. This was caused by the barter
buyers buying only during a short part of the Tea Season which tended to push up prices for
that period. The market would get depressed again as soon as their buying was complete. At
those times of year their prices were out of line with prices in the International market. No free
market blender could depend on getting a consistent supply of Bangladesh teas at reasonable
prices. Hence they looked for, and found, alternate sources as consistency is the most
important component of any brand.

The tea season of 1991-92 was termed as a year of losses. A major broker in their tea review
1992-93 remarked “Depressed tea prices caused serious difficulties for the tea industry during
the last season and as it came hard on the heels of poor results of 1991-92 season producers
found the situation to be very grave as they faced yet another year of losses”. Egypt, USSR,
Iraq, Iran and China were all gone. Poland emerged as the largest buyer, thanks to the
marketing effort of the private sector exporters.

Between, 1995-2000 private sector exporters virtually by their own initiative and effort created
new markets for Bangladesh tea in Jordan, Middle East, CIS, Japan, Afghanistan etc. By the
year 2000, exports to Poland reduced substantially as cheaper teas of other origins made
inroads into this market.

However the total volume of export started declining, as there was a continued growth in
Bangladesh’s internal consumption with little noticeable increase in production. As a result of
the greater demand and shrinking exportable surplus their teas once again became expensive
compared to similar quality teas available from other producing countries, including producers
like China and Malawi and new ones like Vietnam (Source: Srilankan Tea Board website).

In 1985, the domestic consumption of tea was 13 million out of a total crop of 43.3 m. kgs. In
2001 consumption reached a record high of approximately 40 m. kgs. out of a total crop of 55
m.kgs.

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Domestic consumption increased due to some of the following reasons:

• Urbanization and improved standard of living in the country.


• Better distribution as a result of the improved road communication network.
• Better marketing and promotional techniques ensuring of high level of consistency and
quality of the product.
• Re entry of multinational companies in the branded tea market, and Removal of price
control which presented better quality teas reaching the branded market.

In the early days, tea was seen as one of the major foreign exchange earners and thus internal
consumption was discouraged. There was an ad valorem excise duty on branded packet teas
and the price was controlled by the Tea Board. Although the domestic market always wanted
the best quality teas produced it was not possible for the packers to include these in their blends
because of the controls. The higher price good quality teas were available in ‘loose’ form tea
shops. There were times when the retailer would buy branded packet tea at artificially controlled
prices and would open the packet and sell the ‘loose’ tea at much higher prices.

With the onset of the free market economy the packers were allowed to sell their teas in
competition with the loose tea traders. This gave the consumer a greater choice and the
inherent advantages of branded teas soon started to sell in the market place. This is the period
when the largest tea multinational company re-entered the branded Tea Market in Bangladesh.
It was this entry, and the competition which resulted from it, that gave the initial boost to
increase in domestic consumption.

The challenge posed by the multinational was well taken by the organized local private blenders
and packers and huge capital was invested by them to improve the overall infrastructure from
production to marketing. As a result, the sluggish growth of the market has gradually converted
to rapid and sustainable growth. With the improvement of the rural economic environment,
steady population growth as well as the emergence of an economically stable middle class the
domestic consumption may reach approximately 55m.kgs by 2010. Today almost all the tea
consumed domestically is in branded form. There are several nationwide brands and hundreds
of localized brands competing for this growing market.

Producers have also reacted to the changed scenario and have concentrated more than ever on
improving quality as much as it is possible with a view to cater to the domestic market.

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It is significant to note that in 2001, Pakistan’s production was 55 m. kgs. During this year the
global supply growth exceeded demand growth and major auction centers in the world
registered a downward trend in price. However, in Bangladesh the situation was quite different
as tea export in 2001 plummeted to 12.9 m. kgs (yearwise) down by almost 30% on the
previous year but domestic consumption touched 42.2 m.kgs (against 31 m.kgs), as a result of
which the industry survived.

In this context what affect the recent duty free access of Pakistan to Bangladesh tea will have
on our tea industry remains to be seen. It is already apparent that though prices have gone up
the total volume of our exports has not risen. This duty free access will ensure that our prices
are once again out of line with International prices. Those export markets that had been
developed in recent year are already looking for alternative sources. With continued pressure
from domestic demand it is unlikely that Pakistan will be able to purchase their target of 10
thousand tons per annum from Bangladesh. If we cannot ensure sufficient quantity of tea in the
country in keeping with the increase of consumption in the domestic sector, it can lead to import
of tea from other origins. This is something the producers have to be very careful about.

HISTORY OF TEA:

The art of tea cultivation in Bangladesh began over a century and a half ago in the 1840s near
the Chittagong Club. The first tea garden to be established was Malnicherra in Sylhet in 1854.
Its commercial production began shortly thereafter in 1857.

Today, the main tea-growing areas lie to the east of the Ganga-Jumma flood plain in the hill
areas bordering India's Cachar tea-growing district. Most of Bangladesh tea grows at only 80-
300 ft. above sea level northeast of Sylhet in the Seven Valleys. Tea is still grown in Chittagong
as well as in the Hill Tracts.

During pre-partition days and up to the year 1947, all teas produced in the Sylhet and Surmah
valleys were called Indian teas, but were also known as eSweet liquoring Surmah valley teas.
Crop figures for the region during the mid-1940s were approximately 10-15 million kg per year.
The teas were all of Orthodox manufacture, their quality being fairly similar to that of
neighboring Cachar district teas. There was also some Legg-Cut and green tea manufacture
prior to 1947 (Source: Salman Ispahani, Member, Bangladeshiya Cha Sangsad).
Post-Partition 1947-1971

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After partition, the subcontinent was broadly divided into two political regions - India and
Pakistan (comprising West and East Pakistan).
When Pakistan became independent in 1947, there were 133 tea gardens. By 1971, this
number had risen to 147, with roughly 90,000 workers out of a total country population of
249,000 people.

In 1950, under the Pakistan Tea Act, the Pakistan Tea Board was established in Dhaka and in
1957; the Tea Research Institute was founded in Srimangal in 1957. Together, these
organizations aimed at promoting the sale and consumption of tea in Pakistan and abroad, and
at assisting in the research and development of the tea industry.

The Tea Ordinance Act of 1959 replaced the earlier Pakistan Tea Act of 1950 to enhance the
Board's role in promoting tea cultivation and quality control. During the 1952-1953 seasons,
buyers, sellers, and brokers in Chittagong got together, under the auspices of the Pakistan Tea
Association, to form the Tea Traders Association of Chittagong. This association's duty was to
promote the common interests of tea sellers and buyers in the Chittagong market. In 1960, the
Tea Traders Association of Pakistan was registered.

However, by the late 1960s, the need for better quality teas was strong and, with the gradual
decline in the availability of Orthodox teas, CTC teas, particularly the better liquoring types,
received strong support. It was noticeable during this period that the consumer gradually
demanded brighter and better teas, and at the same time, became partial to the strong liquor
produced by the CTC and the Legg-Cut methods of manufacture.

Until 1971, teas continued to be imported to meet the growing internal demand while production
was inadequate. With export restrictions and the captive market of West Pakistan, the tea
industry operated in a seller's market with the 1969 crop being sold in the Chittagong auctions
at Rs 3.50 per lb., against the CIF Chittagong cost of imported tea at Rs 1.50 per lb.

The 1971 War of Liberation

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During the War of Liberation in 1971, the tea industry suffered many setbacks. In addition to the
fact that many factories were damaged, two-thirds of the experienced planters of British and
Pakistan origin left the industry, whilst many senior Bangladeshi planters joined the war. This
meant that inexperienced men who had to combat disturbed conditions were running the
estates. Some of the battles even took place in the tea garden areas, which were very near the
borders. In fact, for the first time after the crackdown on April 4, 1971, the available senior
offices of the Eastern Sector of the Liberation War met at Teliapara Tea estate manager's
bungalow, which became a seat of the Bangladesh Forces Headquarters (BDFHQ) for quite a
time.

In 1947, gardens in East Pakistan had 75,000 acres (30,364 hectares) under tea. Between 1947
and 1960, the acreage devoted to tea increased by 8,000 acres. In the following decade, thanks
to the compulsory 3% extension plan undertaken by the government.

In 1947, Pakistan began with a production of 41.5 million lbs. (19.0 million kg) - approximately
7% of India's production. In 1956, this figure reached 53 million lbs. (24.1 million kg), and in
1971, a record crop of 69.18 million lbs. was harvested.

After 1971

After the war, assistance from England was readily available. At the request of the Government
of Bangladesh, the British agency Overseas Development Administration (ODA) commissioned
the Commonwealth Development Corporation (CDC) in 1973 to assess the requirements for a
process of rehabilitation and reorganization of the tea industry, including tea growing,
manufacture, research, markets and market organization, with an assessment of the financial
and economic returns to such a program. In addition, in 1976 the government-sponsored
Dastagir Committee, which looked into the financial constraints of a number of estates, also
submitted its recommendations that proved to be very effective.

In 1977, the Bangladesh Tea Board was reconstituted with objectives common to those of the
erstwhile Pakistan Tea Board formed under the Pakistan Tea Act 1950, and as the regulatory
body for the tea industry of Bangladesh, the role of the Tea Board expanded to include the

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monitoring of the crop and its disposal, the issuance of export licenses to export buyers, and the
authority to give permission to producers for consignment and direct sales, etc.

In 1974, the Tea Traders Association of Bangladesh replaced the Tea Traders Association of
Pakistan. Eight years later, the metric weight system was adopted for the sale of tea, replacing
the earlier imperial system. The area that produced tea increased from around 43,000 hectares
in 1971 to the present area of about 48,000 hectares. After 1971, an improvement in yield per
hectare was also evident.

Based on the findings and recommendations by the March 1973 Rab Report that aimed to
maximize production, subsequent studies was carried out. By the 1973-74 season, the
production of Bangladesh tea recovered to pre-1971 levels of around 30-32 million kg.

During 1975-76, in an attempt to increase yields, the Tea Board prepared two plans for
intensive cultivation and replanting. Bangladesh Tea Research Institute BTRI, the scientific wing
of the Tea Board, also brought out several high yielding clonal varieties of distinct character and
quality.

By 1979, British consultants had developed a strategy to rehabilitate the damaged tea industry
of Bangladesh. Although by this time an onward program for intensive cultivation and replanting
of the tea was going on, the actual thrust started in 1983-84 and was effective from 1985/85.
During the years 1971-1994, production increased from 24.2 million kg (53.2 million lbs.) in
1972 to 52.1 million kg (115 million lb) in 1994.

Although the number of estates manufacturing Orthodox teas was declining (especially after the
1980s), after independence, Orthodox teas continued to form the bulk of all teas produced.
During this period, CTC teas became increasingly popular in Bangladesh with both internal and
external buyers because they produced stronger and quicker brewing liquor with more cuppage.
Today in Bangladesh, CTC teas account for virtually 99% of all categories of tea produced, the
balance being green teas.

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The quality of Bangladesh teas competing in the world market during this period may be
comparable to lower plain-grown teas from nearby Cachar, Tripura, and the Dooars, as well as
with low, more plain-tasting teas from Sri Lanka and Indonesia (Source: Mr Orman Rafay
Nizam, & Rasul Nizam, Members, Tea Traders Association, Bangladesh).

Table: Tea History of Bangladesh

Year Location District Remarks

1840 Chittagong Club Chittagong Tea cultivation starts

1854 Malnichera Sylhet First Tea Garden in Bangladesh

1857 Malnichera Sylhet Commercial Production starts

1947 Surma Valley Sylhet Products were called Indian Tea

1947-1971 Post Partition duration

1950 Dhaka Pakistan Tea Board was established

1957 Sylhet Tea Research Institute was established


as Srimangal

1959 Dhaka Tea Ordinance Act 1959 introduced

1960 Chittagong Tea Traders Association of Pakistan


registered

1971 Throughout Imported tea to meet local demand.


Bangladesh
Liberation starts

1973 British Agency Overseas Development


Administration (ODA) commissioned
the Commonwealth Development
Corporation (CDC)

1974 Chittagong Tea Traders Association of Pakistan


replaced Tea Traders Association of
Bangladesh

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1976 Government-sponsored Dastagir
Committee formed

1977 Bangladesh Tea Board constituted

1975-76 Attempt to increase yields by Tea


Board

1979 British consultants developed a


strategy to rehabilitate the damaged
tea gardens and industry during
liberation war

1983-84 Replanting starts

TEA SCENARIO OF THE WORLD

World tea exports increased by 4.4 percent in 2004 rising to 1.47 million tons, with all major
exporters registering a rise, according to the report.

Tea production in India, the report said, declined by 4.3 percent with production standing at
around 820,200 tonnes due to unfavourable weather conditions and for the closure of
about 70 tea gardens in Assam.

World net tea imports increased in 2004, by 1.5 percent, which is 1.42 million tonnes. This trend
reflected the increases in traditional developed country markets of the European
community (an increase of 2.4 percent), the United States (5.3 percent) and Japan (2
percent), where imports reached to 215, 000 tonnes, 99 000 tonnes and 56 000 tonnes
respectively.

At its Twelfth Session, the Intergovernmental Group on Tea stressed the importance of
analyzing longer-term market prospects in order to determine appropriate strategies to maintain
remunerative tea prices, taking into full account the impact of such factors as the macro-
economic situation, structural changes in some markets and the impact of international trade
agreements.

This document contains projections which were based on the most recent data available on
black tea production, consumption, trade, and growth in population and income. The projections

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on production were based on a linear trend analysis for each country for the period 1983-85 to
1993-95 and extrapolations to the year 2005. They were adjusted to reflect policy
developments, new and replacement planting and improvements in infrastructure. Consumption
was projected from past trends, estimates of population and income growth and the assumption
of constant real prices. Where possible, projections for black tea were categorised by orthodox
and CTC teas. Stock changes were not considered.

The Group is invited to study the projections and identify fundamental issues and challenges
that may be faced by the world tea economy as it enters into the next century, particularly those
constraining the income of tea producers.

World tea production is projected to increase from the 1993-95 average of 1.97 million tonnes to
2.7 million tonnes in 2005, an annual average growth rate of 2.8 percent. Production in India is
estimated at 1.02 million tonnes in 2005, an average annual growth of 2.8 percent from the
1993-95 base. Most of the envisaged production expansion in Sri Lanka should result from
recent economic reforms and the national plan for tea production expansion. Production by
2005 is projected to reach 285 000 tonnes, compared to 240 000 tonnes during 1993-95, an
annual growth rate of 1.6 percent. Significant growth in production is also projected for other
major tea-producing countries. China and Indonesia would increase black tea production from
180 000 tonnes and 105 100 tonnes to 220 000 tonnes and 160 000 tonnes, respectively.
Output of tea in Bangladesh would grow only moderately from 49 000 tonnes in 1993-95 to 55
000 tonnes in 2005. Increases in both yields and planted area are likely to continue to support
the strong growth in tea production in African countries. Output in Kenya is expected to increase
at an average annual rate of 2.8 percent to 300 000 tonnes in 2005. Malawi, Tanzania and
Zimbabwe are also expected to increase production significantly. Production and yield of tea
produced by small growers in Africa are likely to continue to increase rapidly.

Production expansion programmes initiated by major exporting countries have contributed to


previous increases in output of black tea in recent years, and the impact of these programmes,
particularly as bushes reach optimum production age, may continue. The area harvested of all
tea has increased by almost one million hectares since 1961, from 1.4 million hectares to 2.3
million hectares in 1996. The average yield per hectare has increased by over 50 percent during
the same period. However, the pressure for the cultivation of food crops continues to increase
and it is questionable whether any large scale increases will ensue from now on.

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World black tea consumption is projected to increase from 1.97 million tonnes in 1993-95 to
2.67 million tonnes by 2005, an annual growth rate of 2.8 percent. Developing countries would
account for the largest part of the prospective increase, with consumption rising from the 1993-
95 average of 1.41 million tonnes to 1.95 million tonnes by 2005, an annual growth rate of 3.0
percent. Black tea consumption in India is projected to continue to rise rapidly, reaching 832 000
tonnes by 2005, an annual growth of 3.2 percent from the base period. In other major markets
for black tea such as Pakistan, the Islamic Republic of Iran and Egypt, consumption is projected
at 160 000 tonnes, 122 000 tonnes and 90 000 tonnes by 2005, respectively. The reduction of
import tariffs and declining prices could have a more pronounced effect on consumption in these
countries. The projections also suggest significant increases in black tea consumption in other
developing countries, such as Turkey where consumption would grow at an annual average rate
of 3.2 percent to 150 000 tonnes.

In developed countries, including countries in transition, black tea consumption would increase
more moderately by 2.2 percent annually, to 719 000 tonnes in 2005. Consumption in the
European Community is projected to increase only slightly in the next decade since higher
purchases by France, Germany, Italy and the Netherlands would be largely counterbalanced by
a continuing decline in the United Kingdom. Consumption in the United States is projected to
increase, though at a relatively slow rate of less than one percent. Since many developed
countries impose no, or only slight, restrictions on bulk and packaged black tea imports, the
effect of trade liberalisation on their consumption would be negligible. Black tea consumption in
the countries of the former USSR is projected to increase from 154 000 tonnes in 1993-95 to
250 000 tonnes in 2005, equivalent to an annual growth rate of 4.5 percent over the period.

Import requirements in 2005 are projected at 1.27 million tonnes, an average annual increase of
2.3 percent from average annual imports in the 1993-95 base periods. Import requirements by
developing countries would increase more rapidly, by about 3.1 percent annually to reach
626000 tonnes while import demand in developed countries is projected to increase by about
1.6 percent annually to 642 000 tonnes. In volume terms, the major importers would be the
countries of the former USSR (mainly the Russian Federation), Pakistan, the United Kingdom,
Egypt and the United States which would account for 51 percent of total import requirements.
The average annual growth rate of imports by the former USSR is projected at 2.4 percent
though this may have to be revised downward if the current economic crisis continues.

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Net export availabilities are projected to reach 1.292 million tonnes in 2005, an average annual
increase of 2.5 percent from the actual exports of 985 000 tonnes during the base period.
China, India, Indonesia, Sri Lanka and Kenya are expected to account for 78 percent of the total
projected export availabilities. Bangladesh, Malawi, Tanzania, Turkey and Zimbabwe are also
expected to increase export availabilities significantly during the projection period.

Most of the increase in the volume of export availabilities would originate in Asia. Exports from
India, the world's largest tea producer and consumer are expected to recover from the recent
disappointing performance while satisfying growing domestic demand. Projected export
availabilities for Sri Lanka, currently the largest exporting country, would grow by 1.6 percent
annually to 263 000 tonnes in 2005. China, Indonesia and Bangladesh are also projected to
increase export availabilities. China would continue the rapid growth of tea sales from the
eighties and early nineties reaching 192 000 tonnes in 2005, while Indonesia and Bangladesh
would attain export availabilities of 140 000 tonnes and 32 000 tonnes, respectively.

Substantial growth in export availabilities is also projected for African tea exporting countries.
The region's total export availabilities are projected to amount to 401 000 tonnes in 2005, an
annual increase of 2.8 percent from an average of 295 000 tonnes during 1993-95. Kenya,
which currently accounts for 70 percent of African tea exports, would increase its availability
from 203 000 tonnes (1993-95 average) to 276 000 tonnes in 2005, an average annual growth
rate of 2.8 percent. Malawi, with average shipments of 36 000 tonnes in 1993-95, is expected to
increase its exports to 44 000 tonnes in 2005. For the other African countries export
availabilities would amount to 30 000 tonnes in 2005.

The projections indicate that by 2005, world black tea production and consumption could almost
be in balance at 2.7 million tonnes, representing a growth rate of 2.8 percent for each.
Production gains would largely result from higher yields, whereas the rise in consumption would
largely be due to population and income growth. Developing countries would account for most
of the growth and their share in world consumption would rise by 2 percent over the projections
period. However, much will depend on economic development of these countries.

More importantly, the projections suggest an imbalance in the international market. The
projected surplus of export availabilities over import requirements would be about 24 000 tonnes
by 2005 from an almost balanced market in 1993-95. This possible imbalance implies that world

21
market prices would be under downward pressure if there were no additional increases in
demand and/or downward adjustments in production.

There are several ways of narrowing the trade deficit and improving prices, which the Group is
aware of and has attempted to address. The most obvious way is by attempting to expand
consumption through promotion. Over the last few years, the major efforts of the Group have
been to create awareness of the health benefits of tea drinking and to work out a generic
promotion programme that would stimulate consumption of tea. The project on tea and health
that has been executed for the Group by the United Kingdom Tea Council comes to an end in
December 1999, and the Group will have to decide at this Session on the most effective method
of keeping up the momentum.

The projected gap between exports and imports could also be further reduced through trade
liberalisation, particularly of "retail-packed" teas. The direct impact of the Uruguay Round
Agreement on bulk tea imports is small since tariffs imposed by major importing countries are
already very low or at zero. However, most of the potential growth markets have high import
tariffs on "retail-packed" black tea which have restricted exports to those countries. Any
reductions of these tariffs would make it possible to expand the value-added trade, and would
offer new opportunities for tea exporting countries.

Another obvious means of reducing the gap between export availability and import demand and
thereby improving prices is through the rationalisation of production in major exporting countries
to relieve the supply pressure on the world tea market.

Therefore, given the prospect of downward pressure on prices, the commodity policy for tea for
the next decade should largely concentrate on the exploration of possible new and market-
orientated approaches (source: www.teacouncil.co.uk).

ANNEX
TABLE 1 -Black Tea : Actual and Projected Production

PRODUCTION
Countries / Regions Actual Projected GROWTH RATES
1984* 1994* 2005 1984* / 1994* 1994* / 2005
Thousand Metric Tons Percent per year

WORLD 1858 1970 2681 0.6 2.8

22
DEVELOPING 1728 1941 2581 1.2 2.6

Africa 244 335 457 3.2 2.9


Kenya 128 222 300 5.7 2.8
Malawi 36 36 45 0.0 2.0
Rwanda 9 7 15 -2.5 7.2
Tanzania 16 24 32 4.1 2.6
Zimbabwe 13 14 20 0.7 3.3
Other 42 33 45 -2.4 2.9

Latin America 52 65 78 2.3 1.7


Argentina 36 51 54 3.5 0.5
Other 16 14 24 -1.3 5.0

Near East 161 175 255 0.8 3.5


Iran 44 53 85 1.9 4.4
Turkey 117 122 170 0.4 3.1

Far East 1264 1360 1777 0.7 2.5


Bangladesh 41 49 55 1.8 1.1
China 199 180 220 -1.0 1.8
India 618 749 1015 1.9 2.8
Indonesia 92 105 160 1.3 3.9
Sri Lanka 200 240 285 1.8 1.6
Viet Nam 8 10 20 2.3 6.5
Other 106 27 22 -12.8 -1.8

Other developing 7 5 14 -3.3

Developed 130 28 100 -14.2 12.3

Former USSR 120 16 80 -18.2 15.8


Other 10 12 20 1.8 4.8

* = Averages for 1983-85 and 1993-95


TABLE 2 - Black Tea : Actual and Projected Consumption

CONSUMPTION
Countries / Regions Actual Projected GROWTH RATES
1984* 1994* 2005 1984* / 1994* 1994* / 2005
Thousand Metric Tons Percent per year

WORLD 1876 1970 2669 0.5 2.8

DEVELOPING 1235 1405 1950 1.3 3.0

23
Africa 75 82 101 0.9 1.9

Latin America 18 27 41 4.1 3.9

Near East 282 417 584 4.0 3.1


Egypt 70 62 90 -1.2 3.4
Iran 43 85 122 7.1 3.3
Iraq 41 1 54 -31.0 43.7

Far East 858 877 1194 0.2 2.8


China 79 77 76 -0.3 -0.1
India 413 590 832 3.6 3.2
Pakistan 87 113 160 2.6 3.2

Other developing 2 2 30 0.0 27.9

DEVELOPED 641 566 719 -1.2 2.2

North America 98 96 105 -0.2 0.8


Canada 19 13 13 -3.7 0.0
U.S.A. 79 83 92 0.5 0.9

Europe 265 257 279 -0.3 0.7


EC 222 215 229 -0.3 0.6
UK 165 148 135 -1.1 -0.8
Other Europe 43 42 50 -0.2 1.6

Former USSR 218 154 250 -3.4 4.5

Oceania 28 21 28 -2.8 2.6

Other Developed 32 38 57 1.7 3.8

* = Averages for 1983-85 and 1993-95

TABLE 3 - Tea : International Trade , Actual and Projected

EXPORTS IMPORTS
Countries / GROWTH GROWTH
Regions Actual Projected RATES Actual Projected RATES
1984* / 1994* / 1984* / 1994* /
1984* 1994* 2005 1994* 2005 1984* 1994* 2005 1994* 2005
Thousand Metric Tons Thousand Metric Tons Percent per year

24
WORLD 929 985 1292 0.6 2.5 911 985 1268 0.8 2.3

DEVELOPING 929 985 1292 0.6 2.5 420 447 626 0.6 3.1

Africa 197 295 401 4.1 2.8 55 42 50 -2.7 1.6


Kenya 106 203 276 6.7 2.8
Malawi 37 36 44 -0.3 1.8
Rwanda 9 5 9 -5.7 5.5
Tanzania 13 20 29 4.4 3.4
Zimbabwe 9 9 13 0.0 3.4
Other 32 23 30 -3.2 2.4

Latin America 53 53 55 0.0 0.3 14 15 25 0.7 4.8


Argentina 44 43 42 -0.2 -0.2
Other 9 10 13 1.1 2.4 15 25 4.8

Near East 2 17 25 23.9 3.6 238 258 366 0.8 3.2


Egypt 71 62 100 -1.3 4.4
Iran 1 2 0 7.2 0.0 30 34 37 1.3 0.8
Iraq 41 1 54 -31.0 43.7
Turkey 1 16 25 32.0 4.1
Other 162 175 0.7

Far East 671 613 811 -0.9 2.6 111 131 162 1.7 1.9
Bangladesh 28 27 32 -0.4 1.6
China 91 103 192 1.2 5.8
India 213 159 165 -2.9 0.3
Indonesia 78 89 140 1.3 4.2
Sri Lanka 187 222 263 1.7 1.6
Pakistan 87 113 140 2.6 2.0
Viet Nam 11 9 17 -2.0 6.0
Other 74 4 2 -25.3 -6.1 18 22 1.8

DEVELOPED 491 538 642 0.9 1.6

North America 98 96 105 -0.2 0.8


Canada 19 13 13 -3.7 0.0
U.S.A. 79 83 92 0.5 0.9

Europe 265 257 284 -0.3 0.9


EC 222 215 234 -0.3 0.8
France 9 9 12 0.0 2.6
Germany 16 17 32 0.6 5.9

25
Italy 3 5 7 5.2 3.1
Netherlands 10 15 16 4.1 0.6
UK 165 148 135 -1.1 -0.8

Other Europe 43 42 50 -0.2 1.6

Former USSR 69 139 180 7.3 2.4

Oceania 27 20 28 -3.0 3.1

Other
Developed 32 27 45 -1.7 4.8

* = Averages for 1983-85 and 1993-95

TEA PRODUCTION IN BANGLADESH

Bangladesh is a small Tea producing country sharing 3% of the world's Tea production. Tea is
an agro-based, labour intensive and export oriented sector and plays an important role in the
national economy through export earnings, trade balancing and employment generation. Our
Tea industry dates back to 1857 when the first Tea garden was established at Malinichera in
Sylhet District. Today there are 161Tea gardens with a graned area of 1, 14,288.26 hactor of
which 51225.65 ha or 44.82% is under cultivation. Though our tea industry suffered a serious
set-back in 1971 but we could succeed in reversing with the help of the government, foreign
assistance and hard work of our planters. We hope to increase our production to an average of
over 1500 Kg per ha in a few years time. We have undertaken measures to improve our quality
of tea by extending the area with new varieties of hybrid clone, modernizing factories and
improving infrastructure. We now annually produce 56 million Kg of Tea and we hope to
increase our production to 90 million Kg in the next 15 years.

Production during 1970 was 31.6 millions kgs but just after liberation it slumped to 12 m. kgs.
However, the recovery was quick and by 1974, production had again reached the pre-liberation
level of over 31m kgs.

From the Year 2002

26
1. Total Tea State 161 Tea Area, Production & Yield of Last 5 years
114,288.26 Tea Area Production
2. Grant Tea Year Yield/ha (kg)
ha (ha) (mkg)
3. Total Tea Area 51,225.65 ha 1996 48,100 53.41 1,115
(44.28%) 1997 48,570 50.53 1,040
1998 48,571 55.82 1,149
a) Seedbari/Nursery 999.91 ha
1999 48,611 46.19 950
Immature Tea (0- 2000 49555 52.64 1,1 70
b) 4509.55 ha
5 years) 2001 50288 56.82 1257
2002 51225 53.62 1172
Young Tea
c) 4729.70 ha
(6-10 years)
Mature Tea (11-40 Quantity Sold & Average Price Realized during
d) 20,312.73 ha
years) Last 5 years
Old Tea (41-60 Chittagong
e) 9248.39 ha Export ( FOB )
years) Auction
Year
Very Old Tea ( Qty. Price Price Price
f) 11425.37 ha (mkg) (Tk/kg)
Qty. (mkg)
(Tk/kg) (US$/kg)
above 60 )
Total Area Not 1996-
4. 63,062.61 ha 16.16 46.51 2 5.39 51.64 1.17
Under Tea 97
1997-
Agriculture Use 43.65 81.07 24.45 83.12 1.89
98
1998-
a) Rubber 5929.22 ha 49.40 61.30 23.50 71.41 1.47
99
1999-
b) Planted Forest 2062.95 ha 40.72 58.44 12.61 65.48 1.18
00
c) Natural Forest 14,143.36 ha 2000-
45.67 58.12 16.52 67.89 1.26
d) Herbal Plantation 2000 ha 01
d) Bamboo 4438.40 ha Human Resources of Tea Estates
e) Thatch/Sun grass 3482.76 ha Total Population 360,686
f) Paddy Land 12,933.64 ha Men 38,764
Other Economic
g) 1349.58 ha Women 40,357
Crop
Registered
Non Agriculture Use 95,097
Labour
Adolescent
a) Fallow/Waste Land 5708.95 ha 11,108
b) Stream/Pond etc. 3064.50 ha Casual Labour 20,641
c) Infrastructure 6871.95 ha
d) Other Uses 3,077.30 ha
Area further Suitable
5. for Tea 11,580.52 ha
Cultivation
Management Information Labour Welfare Facilities to Tea Estates
Pucca Labour
Total Manpower 5063 17,013 Hospital 55
House

27
Cutcha
Manager, Asst.
415 Labour 43,332 Dispensary 146
Manager
House
Other Staff 4648 No. of Beds 691
Cr 裨 e 179

Hand Tube
2,420 School 186
Well
Surface Well 5,264 Teacher 381
Deep Tube
87 Student 22,810
Well

Source: Bangladesh Tea Board Tea Board Website: www.bdtboard.org

Basic Facts of Bangladesh Tea Industry

a) No. of Tea Estates 161


b) No. of Tea Factories 114
c) Total Allotted Area 114288.26 ha.
d) Total Area under Tea 51225.65 ha.
e) Total Production (2002) 53.62 m. Kg.
f) Per Hectare Yield (2002) 1172.89
g) Total Export (2002-2003) 12.17 m. Kg.
h) Internal Consumption (2002-03) 39.81 m. Kg.
i) Average Auction Price per Kg. (2000-2001) 58.12 (ctg.), 67.89 (FOB)
Source: Bangladesh Tea Board Web Site

Characteristics of Bangladesh Tea


Our Tea grown on the lush green slopes of different Valleys are famous for following:

Appearance Clear
Color Bright
Liquor Pungent, i. e. strong but not better
Flavor Same as Assam Tea
Quality Has character of brightness with briskness

Manufacturing Process

28
After Plucking, green leaves are transported to the factory for manufacture. The process
of manufacturing comprises of the following stages:
• Withering i. e. moisture removal of about 10-15% (i.e. 65-70% wither) from
leaf and bringing some chemical changes for optimum quality development.
• Fermentation i. e. oxidation process when tea etching i.e. polyphonals is degraded to
desirable biochemical constituents named Theo Flavin (TF) and Thea Rubigin (TR).
• Drying i. e. moisture removal from oxidized leaf to 2-3% at dyer mouth level.
• Sorting i. e. grading of made Tea according to particles sizes and are given a
grade name. These names are categorized, like: FP, FBOP, BOP, and GBOP, OF, FOF,
PF, PD, RD, and CD (10 primary grades of CTC).

Bangladesh Tea is shipped in chests, gunny bags or paper sacks of International standard
bearing an original garden mark, bulked or blended. Care is taken to ensure that each
consignment, however small, reaches its destination as fresh as it was when it left the
garden.

Types of Tea

With the introduction of clonal Teas (BT Series) a touch of pleasant flavor is acclaimed
worldwide.
Bangladesh is manufacturing two types of teas as under
a) Black Tea (CTC) 99%
b) GREEN TEA 1%
c) Orthodox
d) Organic

The processed Teas after grading as per size and make are packed in airtight as plywood chest
sack on binned any bags and send to Ware-Houses in Chittagong for sale through auction.

Grades of Tea

Category Grades

BROKEN FP (Flowery Pekoe)


FBOP (Flowery Broken Orange Pekoe)
BOP (Broken Orange Pekoe)

29
GBOP (Golden Broken Orange Pekoe)

FANNING OF (Orange Fanning)


FOF (Flowery Orange Fanning)
PF (Pekoe Fanning)

DUST PD (Pekoe Dust)


RD (Red Dust)
CD (Churamani Dust)

Bangladesh has dedicated teams of technical staff have years of experience in producing,
packaging and selling tea and tea-related products. With laboratory, pilot plant and factory scale
manufacturing facilities in 8 countries we offer an unrivalled breadth of resources and
experience to our customers, covering the whole supply chain ……..from field to finished
product!

Plantations give us the unique opportunity to begin innovating at the very point the tea starts
growing! Having our technical teams working alongside the production staff on location in our
plantations and factories offers unique opportunities for new product and process development.
We aim to deliver quality products to our customers that allow all the benefits of our knowledge
and experience to be passed on to your customers.

Backing up the cutting edge knowledge of the staff in our factories we use accredited
laboratories and acknowledged world experts in food and beverage analysis to ensure product
quality meets our stringent specifications and of those of our customers. Working closely with
our customers we aim to be our outsource partner of choice for all tea-related products, new
ingredient and product development, and expert knowledge. This lets us focus on the
development and marketing of branded products, while leaving production to the experts.

Teas are being exported to the Internatioanl market in the following forms:

1. Black leaf tea for packet and tea bags:


2. Hot Water Soluble Instant Tea:
• Spray Dried
• Freeze Dried

30
3. Cold Water Soluble Instant Tea:
4. Liquid Tea Concentrates:
5. Ready-to-Drink Tea:
6. Decaffeinated Teas:
• Decaffeinated leaf teas
• Decaffeinated instant teas
7. Green Teas:
• Leaf teas
• Instant teas
8. Tea Aromas and Tea Oil:
9. Organic Teas:
10. Orthodox Teas:

The seasonal nature of rainfall and temperature results in an uneven pattern of tea production.
Annual rainfall is in the range of 90180 inches and falls mainly between May and October.
Almost 80% of the crop is manufactured in the six months from June to November. The dry
season from mid-October to mid-May is divided into a cool season (mid-October to mid-
February) and a very hot desiccating season (mid-February to mid-May) These extreme
conditions tend to cause severe stress on the unshaded tea plants on southerly and westerly
slopes.

Most estates are situated on valley sides. However, approximately 25% of the area runs down
into swampy valleys where tea can be maintained only if the land can be drained and kept free
from the water which backs up from paddy cultivation downstream. The topography rises from
these ebheelsi, or low flats, through high flats or undulating slopes, representing about 45% of
the tea-growing areas to steep sloping hills or ridges called tillahs.

There are two major geological formations in Bangladesh, both sedimentary in origin. The older
of the two forms the hills and consists of quartzite and ferruginous gravel, sandstone, silts and
clays, with outcrops of laterite, ferrocrets and occasionally lignites. The younger formation, still
being deposited, forms the lowlands and consists of sands, silts, and clays brought down by the
river systems draining part of the Himalayas and the hills of the Manipur and the Mize districts.
The older formation yields soils rich in iron which tend to be acidic, whilst the younger formation

31
(with little intrinsic nutrient value) provides inherently fertile soils with adequate calcium levels
but vunerable to waterlogging in low-lying areas.

The Bangladesh tea industry, has undergone significant changes both at a national and at a
global level in the last three or four decades.

There has been a shift in the method of manufacture from Orthodox teas to virtually 99% CTC
manufacture, with the balance being green tea.

Orthodox leaves continued to form the bulk of the produce, with a little processing of Legg-Cut
and green teas. Since quality is determined by environmental conditions, particularly by
elevation, the gardens in Pakistan, by virtue of locality, are naturally not in a position to produce
quality teas. Instead, our Bandlesh or Pakistan teas were classified in the world market as
'clean common' and were in demand by blenders overseas who used them as fillers.

32
Last 10 Years TEA Production, Export & Export Earnings from
Bangladesh Tea
(Based on Calendar Year)
Production (m.
Sl No. Year Export (m.kg) Export Earnings (m.taka)
kg)
1. 1994 51.64 23.65 1166.16
2. 1995 47.67 25.43 1291.75
3. 1996 53.41 26.13 1349.28
4. 1997 50.53 25.17 1775.39
5. 1998 55.82 22.22 1808.57
6. 1999 46.18 15.18 1008.70
7. 2000 52.64 18.10 1205.19
8. 2001 56.82 12.92 894.99
9. 2002 53.62 13.65 939.93
10. 2003 56.83 12.18 915.07

Source: a) BTB, b) PDU


Annual Report 2004

Last 10 Years TEA Production, Export & Export Earnings


from Bangladesh Tea (Based on Financial Year)
Export Average Average
Production Export
Sl No. Year Earnings Price Price Value (m.US$)
(m.kg) (m.kg)
(m.taka) (Tk./kg) (US$/kg)
1. 1993-94 51.73 27.42 1521.00 55.48 1.39 38.03
2. 1994-95 47.04 26.72 1241.45 46.47 1.16 31.04
3. 1995-96 52.14 21.43 1176.03 54.88 1.37 29.40
4. 1996-97 52.67 25.39 131.18 51.64 1.17 29.80
5. 1997-98 51.25 24.45 2032.29 83.12 1.89 46.18
6. 1998-99 50.26 23.50 1678.29 71.42 1.47 34.59
1999-
7. 49.75 12.61 825.73 65.48 1.18 14.85
2000
2000-
8. 53.13 16.53 1122.14 67.69 1.19 19.68
2001
2001-
9. 55.20 13.80 947.00 68.62 1.20 16.55
2002
2002-
10. 54.60 12.17 870.91 71.65 1.22 14.89
2003
Source: a) BTB, b) PDU
Annual Report 2004

TEA MARKET PROCEDURE

33
Bangladesh Tea Auction Center in Chittagong has good warehousing and port facilities besides
excellent road, rail and air links. While our tea gaining popularity, Bangladesh Tea researchers
continue their relentless efforts to innovate and improve the quality of Bangladesh Tea to meet
the demands of the 21st century.

While manufacturing Tea, bright liquor with sufficient strength and aroma, pungency and ISO
3720 are ensured.

Tea holds a special place in the agricultural sector of Bangladesh economy. It is a major cash
crop well as an important export item, It accounts for about 0.81% of the GDP and provides
employment in the country.

As mentioned earlier domestic consumption of tea in our country has been increasing at a much
faster rate than the rate of increase of our tea production which leads to gradual shrinking of our
exportable surplus. To meet this increasing internal demand and to export some tea to earn
foreign exchange maintaining at least a 60:40 ratio, we will have to take effective measures to
increase tea production.

Rate of increasing of Production of tea in Bangladesh is very low due to various reasons arising
out of technical, financial and management problems. Effective research needs to be conducted
with a view to raising productivity of our tea and improving its quality. A strategic research plan
has to be formulated with comprehensive programs for all round development of the tea
industry.

Marketing system of Bangladesh tea is defined as the process of sale of manufacture tea in bulk
or packed from tea estates to the buyers at Chittagong Auction or at estates levels from where
teas are sold either directly to overseas buyers or internal traders. Tea Auction is held every
Tuesday at Chittagong, a major port city with sufficient warehouses and port facilities and well
connected by road, railways and air link.

The marketing of tea in Bangladesh can be divided into two segments. They are:

a) Internal Marketing

b) External Marketing

34
Internal Market:

Internal market deals in wholesale and retail business of tea for internal consumption in the
country. In this case wholesale, retail and blending licenses are to be obtained from Bangladesh
Tea Board. Here teas are sold under ex-garden sale and through auction.

i) Ex-Garden Sale: Sales by the producers directly from the estates to the internal
buyers with prior approval from Bangladesh tea board.

ii) Auction: Local traders having Biddership license from Bangladesh Tea Board, can
purchase tea from Chittagong auction in internal account to sale in the internal
Market.

External Market:

External market deals in export business of tea. Here teas are sold under direct contract
sale and through auction.

i) Direct contract sale: Tea can be exported to foreign buyers through direct
negotiation between the buyer and producer with prior approval from Bangladesh
Tea Board.

ii) Auction: Traders having Biddership license from Bangladesh Tea Board can
purchase tea from Chittagong Auction in external account to export tea. For export
this has to obtain license from Bangladesh Tea Board.

The Supply of Tea to the Auctions

The auctioning company, which is the fulcrum of the auction system, is comprised of
professionals who combine multi-faceted talents as tea tasters, valuers, quality controllers,
auctioneers, and independent arbitrators and consultants between buyers and producers.

Auctions in Chittagong commence in early May and continue up to the third week of March of
the following year, by which time the entire crop has been disposed of. Buyers operating in the
Chittagong auctions are registered as export or internal buyers. At the beginning of each new
season, producers nominate brokers for the disposal of their crops through the Chittagong

35
auctions. The broker charges 1% of the sale price as brokerage and also collects an additional
1% as Tea cess levied by the Bangladesh Tea Board on all producers.

The Supply of Tea to the Domestic Market

The systems used for the supply of tea to the domestic market are the Chittagong Auction sale
and direct sales by producers in bulk or value added form, or both. The domestic market
consists of loose tea traders and blenders. Internally, more than 70% of teas are sold loose or in
bulk form through a network of licensed wholesalers on whose behalf internal buyers operate.

There is a small market for packet tea, mainly confined to middle and upper-middle income
groups in the urban areas. Sale of teabags constitutes an even smaller percentage of all teas
consumed in the domestic market. Value Added teas (i.e. packet teas and tea bags) are
principally a blend of teas available in the local auctions, ex-factory sale to local traders, and
garden packed teas from the estates themselves.

As the bulk of teas supplied to the domestic market has always been in loose or original form,
the major marketing system prevailing for the supply of such teas has been the Chittagong
auctions.

Direct sales by producers to the domestic market constitute less than 5% of all teas consumed
and are presently one million kg.

Of the estimated domestic consumption of around 27 million kg, the market share of loose tea is
almost 70% at roughly 18-19 million kg per annum, whilst value added teas (including garden
packed), at roughly 8 million kg per annum, is nearly 30% of total consumption. Sales of
teabags are minimal and are estimated at less than 5% of the value added market.

Recent figures for sales of value added teas have shown an upward trend. There has also been
an increase in the number of blenders operating in the domestic market; these blenders are now
in close competition for the brand name market for packet teas and tea bags, the sale of which
is increasing rapidly and also includes the direct sale of garden packed teas by producers (run-
on). This is indeed a positive sign and an expansion in the system prevailing for the supply of
tea to the domestic market. Further, with continued economic stability and prosperity comes an
increase in the general purchasing power of the consumer, which will no doubt be beneficial in
the marketing of tea for domestic consumption.

36
Weekly Chittagong Tea Auction Report

Sale No 40 Held on Tuesday 10th February, 2004

Total Sale 68% Withdrawal 32% Av.Price. Tk. 65.27

Offering
CTC LEAF 1,680,300 Kg
CTC DUST 227, 050 Kg
Total 1,907,350 Kg

Total Sale Up to Sale No.39= 43,625,760 KGs


Average Price Up to Sale No.39 = Tk. 64.87

Quotations (In Bangladesh Taka)

BROKENS FANNINGS DUST


TK US$ TK US$ Tk US$
40.00-
Bold 0.69-0.83 73.00-75.00 1.26-1.29 43.00-75.00 0.74-1.29
48.00
53.00-
Medium 0.91-1.15 67.00-72.00 1.15-1.24 45.00-75.50 0.77-1.03
67.00
65.00-
Small 1.12-1.27 60.00-66.00 1.03-1.14 38.00-82.00 0.65-1.41
74.50
40.00-
Plain 0.69-0.90 44.00-56.00 0.76-0.96 50.00-119.00 0.86-2.05
52.00
Exchange Rate US$ 1= BD.TK.58.0834

BROKEN : Small Broken were a stronger market. Plainer were sold at


a lower rate. The Selective liner were sold between Tk. 75.00 Tk. 85.00
FANNING : Well made and good liquoring fanning were fully firm to a much dearer
market. The selective best lines were sold between Tk. 76.00 - Tk. 80.00

37
DUST : A few good liquoring RDS\ PDS\ DS sold well and were dearer by up to
Tk.5.00 and some times more. Planer and poorer types were mostly neglected.
ORTHODOX : The first consignment of tea comprising 21 packages of Orthodox
organic Tea from Tetuli in Panchagarh was offered in the auction and sold from a rang of
TK.75/-to TK 650/- per kg.
COMMENTS : There was a strong demand for all clean and good liquoring Tea.
Pakistan was active including the Packeteers and the local traders.
Next Sale : Next Auction sale no. 41 will be held on Feb. 17th 2004 at 8-30 AM. Total
offering will comprise of 36000 Packages Leaf and 5000 Packages Dust.

World Tea Packaging

Tea bags
Tea leaves are packed into a small (usually paper) tea bag. It is easy and convenient,
making tea bags popular for many people nowadays. However, because fannings and
dust from modern tea processing are also included in most tea bags, it is commonly held
among tea aficianados that this method provides an inferior taste and experience. The
paper used for the bag can also be tasted by many which can detract from the tea's
flavour.
Additional reasons why bag tea is considered less well-flavoured include:

• Dried tea loses its flavour quickly on exposure to air. Most bag teas
(although not all) contain leaves broken into small pieces; the great surface-area-
to-volume ratio of the leaves in tea bags exposes them to more air, and therefore
causes them to go stale faster. Loose tea leaves are likely to be in larger pieces,
or to be entirely intact.
• Breaking up the leaves for bags extracts flavoured oils.
• Good loose-leaf teas tend to be vacuum packed.

Loose tea
The tea leaves are packaged loosely in a canister or other container. The portions must
be individually measured by the consumer for use in a cup, mug or teapot. This allows
greater flexibility, letting the consumer brew weaker or stronger tea as desired, but
convenience is sacrificed. Strainers, "tea presses", filtered teapots and infusion bags are
available commercially to avoid having to drink the floating loose leaves. A more

38
traditional, yet perhaps more effective way around this problem is to use a three-piece
lidded teacup, called a gaiwan. The lid of the gaiwan can be tilted to hold back the
leaves while sipping the tea.
Compressed tea
A lot of tea is still compressed for storage and aging convenience. Commonly Pu-Erh tea
is compressed and then drunk by loosening leaves off using a small knife. Most of the
time Compressed tea can be stored longer than loose leaf tea.
Tea Sticks
One of the more modern forms of tea consumption, an alternative to the tea bag, is tea
sticks.
The first known tea sticks originated in Holland in the mid 1990's, where a company by
the name of Venezia Trading produced a tea stick named Ticolino. Ticolino are dubbed
as single serving tea sticks which use an infusing technology to brew the tea leaves
inside, releasing the flavour and aroma.

EXPORT OF TEA

Tea Production, Export & Export Earning

TEA PRODUCTION, EXPORT & EXPORT EARNINGS FROM BANGLADESH TEA SINCE 1973-74 TO
2002-2003

Year Production (mkg) Export (mkg) Export Earning (m


taka)
1973-74 29.89 21.53 105.23
1974-75 31.28 23.50 190.79
1975-76 31.30 22.33 257.45
1976-77 35.64 29.42 558.76
1977-78 36.35 28.63 769.11
1978-79 36.70 27.10 620.79
1979-80 39.81 23.88 510.00
1980-81 41.90 29.85 664.76
1981-82 38.54 31.32 760.28
1982-83 42.86 30.81 1096.38
1983-84 39.46 30.74 1690.67
1984-85 42.89 25.85 1560.68
1985-86 38.77 29.82 973.10
1986-87 40.26 21.41 901.32
1987-88 41.62 27.56 1204.81
1988-89 41.27 25.12 1263.45
1989-90 42.56 22.57 1283.00

39
1990-91 44.61 26.45 1523.61
1991-92 46.79 23.64 1230.76
1992-93 49.30 33.09 1597.59
1993-94 51.73 27.42 1521.00
1994-95 47.04 26.72 1241.45
1995-96 52.44 21.43 1176.03
1996-97 52.67 25.39 1311.18
1997-98 51.25 24.45 2032.29
1998-99 50.26 23.50 1678.29
1999-2000 50.22 12.61 825.73
2000-2001 53.41 16.53 1122.14
2001-2002 55.20 13.80 947.00
2002-2003 54.60 12.17 870.91

COUNTRY-WISE EXPORT OF BANGLADESH TEA SINCE 1998-2003


Qty. in m kg & Value in m taka
1998-99 1999-2000 2000-2001 2001-2002 2002-2003
Sl No. Country
Qty. Value Qty. Value Qty. Value Qty. Value Qty. Value
1 Pakistan 6.19 422.84 4.84 305.94 7.38 489.90 2.03 125.46 6.19 432.49
2 Poland 6.92 461.18 1.94 110.74 0.14 7.32 0.42 25.45 0.66 45.48
3 U.K. 0.72 55.71 0.42 29.87 1.13 94.29 0.93 75.51 0.28 21.18
4 India 0.39 24.43 0.72 42.41 0.07 4.43 0.05 2.96 - -
5 Russia 2.49 188.72 0.36 23.50 0.66 42.87 0.39 25.59 0.38 24.80
6 Germany 0.04 3.16 0.10 10.17 - - - - - -
7 Sudan 0.35 20.81 - - 0.04 2.01 - - - -
8 Kenya 0.11 16.72 0.02 1.05 0.31 17.13 0.36 7.79 0.41 9.00
9 Iran 1.01 81.78 0.68 50.00 0.72 47.02 2.39 164.22 0.26 17.23
10 Oman 0.06 6.51 0.03 3.12 0.06 6.31 0.05 4.38 0.05 6.03
11 Jordan 0.06 3.74 - - - - - - - -
12 Afghanistan 0.92 76.79 0.39 25.44 4.25 275.40 5.57 381.62 2.26 157.70
13 Egypt 0.03 2.55 - - - - - - - -
14 UAE 1.05 78.35 0.63 49.92 0.43 34.03 0.26 23.78 0.23 22.22
15 China 0.24 14.76 - - - - - - - -
16 Kuwait 0.01 2.25 - - - - - - 0.02 2.07
Saudi
17 0.05 6.68 0.05 5.56 0.04 4.32 0.02 2.74 0.07 11.89
Arabia
18 Japan 0.16 14.56 - - - - - - - -
19 Greece 0.01 0.73 0.01 0.69 0.02 1.28 0.05 3.16 0.01 0.81
20 Kazakhstan 1.81 141.46 1.45 104.11 1.18 92.11 1.18 100.57 1.29 114.32
21 Qatar - - - - - - - - 0.04 4.75
22 Taiwan - - - - - - - - - -
23 Ukraine - - 0.30 20.64 0.4 2.60 - - - -
24 Kyrgistan 0.07 5.56 0.30 19.65 - - - - - -
25 Turkimistan 0.39 25.16 0.21 14.06 - - - - -- -

40
26 Turkey 0.33 19.99 0.05 4.68 - - 0.02 1.74 - -
27 Yemen - - - - - - - - - -
28 Uzbekistan 0.01 1.69 0.06 3.70 - - - - - -
29 Tazakistan 0.02 1.63 - - - - - - -
30 Others 0.06 0.53 0.05 0.49 0.06 1.12 0.08 2.03 0.02 0.94
Total 23.50 1678.29 12.61 825.74 16.53 1122.14 13.80 947.00 12.17 870.91
Source: BTB. Annual Report 2004

41
PRODUCTION & EXPORT OF TEA PRODUCING COUNTRIES

Production in m Kg

Sl Production Export
Country
No.
2001 2000 1999 1998 1997 2001 2000 1999 1998 1997
Banglades
1. 56.82 52.64 46.19 55.82 50.52 12.92 18.10 15.18 22.23 25.15
h
WORLD PRODUCTION OF TEA AND SHARE OF DIFFERENT COUNTRIES (1996-2000)
2. India 853.71 846.48 824.41 874.11 810.03 179.85 204.35 189.09 207.64 200.17

3. Sri Lanka 296.30 306.79 284.15 280.67 277.43 287.50 280.13 262.95 265.31 257.27
Production in m Kg
S l N
4. China o . N a m e o f th e P ro d u c tio n
701.70 683.32 675.87 665.03 613.37 249.67 227.66 199.61 217.43 202.46
C o u n try
2001 2000 1999 1998 1997
5. Indonesia 161.20P ro 157.37
duc- % 161.00 166.86
P ro d u c - % 153.62 99.72 105.58
P ro d u c - % P ro d u c % 97.85 67.21
- W o rldP ro d u c -% W o rld 66.84
tio n W o rld tio n W o rld tio n W o rld tio n S h a re tio n S h a re
S h a re S h a re S h a re
6. Iran 46.00 53.00 60.00 60.00 60.00 4.00 3.50 4.00 2.50 2.50
1 . B a n g la d e sh 5 6 .8 2 1 .9 % 5 2 .6 4 1 .8 % 4 6 .1 9 1 .6 % 5 5 .8 2 1 .9 % 5 0 .5 2 1 .8 %

7. Japan
2 . In d ia 89.81 8 589.31 88.51
3 .7 1 2 8 .3 % 8 4 6 .482.61
8 2 9 .0 %91.21
8 2 4 .4 1 7.60
2 8 .4 % 8 70.70
4 .1 1 2 9 .2 0.83
% 8 1 0 .0 30.75
2 9 .6 % 0.58

8. Turkey
3 . S ri L a n ka142.90 2 9130.67 170.56
6 .3 0 9 .8 177.84
% 3 0 6 .7 9 1 0 .5 %139.52
2 8 4 .1 5 48.09
9 .8 % 2 842.00 30.00
0 .6 7 9 .4 % 2 7 7 .4 27.00
3 1 0 .1 %24.90

4 . C h in a
9. Kenya 294.63 7 0236.29
1 .7 0 2 3248.82
.2 % 6 8 3 .3 2 2 3 .4 %220.72
294.17 6 7 5 .8 7258.11
2 3 .3 % 6216.99
6 5 .0 3 2 2 .2241.74
% 6 1 3 .3263.40
7 2 2 .4 %198.55

5 . In d o n e sia 1 6 1 .2 0 5 .3 % 1 5 7 .3 7 5 .4 % 1 6 1 .0 0 5 .5 % 1 6 6 .8 6 5 .6 % 1 5 3 .6 2 5 .6 %
10. Malawi 36.77 42.11 38.47 40.36 43.93 38.26 38.44 42.73 41.01 49.22

6 . Ira n 4 6 .0 0 1 .5 % 5 3 .0 0 1 .8 % 6 0 .0 0 2 .1 % 6 0 .0 0 2 .0 % 6 0 .0 0 2 .2 %
11. Others 341.59 324.77 304.86 292.21 260.07 2.00 185.04 168.64 182.00 172.41
7 . Ja p a n 8 9 .8 1 3 .0 % 8 9 .3 1 3 .1 % 8 8 .5 1 3 .0 % 8 2 .6 1 2 .8 % 9 1 .2 1 3 .3 %
Total 3 ,0 2 1 .4 32 ,9 2 2 .7 52 ,9 0 2 .8 4 2 ,9 8 9 .6 8 2 ,7 3 5 .8 9 1 ,3 9 1 .9 4 1 3 2 2 .4 9 1 2 5 2 .6 2 1 2 9 6 .4 6 1 2 0 0 .6 1
8 . T u rke y 1 4 2 .9 0 4 .7 % 1 3 0 .6 7 4 .5 % 1 7 0 .5 6 5 .9 % 1 7 7 .8 4 5 .9 % 1 3 9 .5 2 5 .1 %
Source: a) Monthly Statistical Bulletin of BTB b) ITC Report-2002
9 . K e n ya 2 9 4 .6 3 9 .8 % 2 3 6 .2 9 8 .1 % 2 4 8 .8 2 8 .6 % 2 9 4 .1 7 9 .8 % 2 2 0 .7 2 8 .1 %

1 0 . M a la w i 3 6 .7 7 1 .2 % 4 2 .1 1 1 .4 % 3 8 .4 7 1 .3 % 4 0 .3 6 1 .3 % 4 3 .9 3 1 .6 %

1 1 . O th e rs 3 4 1 .5 9 1 1 .3 % 3 2 4 .7 7 1 1 .1 % 3 0 4 .8 8 1 0 .5 % 2 9 2 .2 1 9 .8 % 2 7 5 .5 4 1 0 .1 %

1 0 0 .0 %2 ,9 0 2 .8 4
T o ta l 3 ,0 2 1 .4 3 1 0 0 % 2 ,9 2 2 .7 5 42 1 0 0 .0 %2 ,9 8 9 .6 81 0 0 .0 % 2 7 3 5 .8 9 1 0 0 .0 %

Source: ITC Report-2001


WORLD EXPORT OF TEA AND SHARE OF DIFFERENT COUNTRIES (1996-2000)

Production in m Kg
Name of the Production
Country
Sl 2000 1999 1998 1997 1996
No. Export % % % World
% World % World
World Export Export Export World Export Share
Share Share
Share Share
Bangladesh 18.10 1.4% 15.18 1.2% 22.23 1.7% 25.17 2.1% 26.13 2.3%
1.

India 204.35 15.4% 189.09 15.1% 207.64 16.0% 200.71 16.7% 160.00 14.2%
2.

Sri Lanka 280.13 21.2% 262.95 21.0% 265.31 20.5% 257.27 21.4% 233.57 20.7%
3.

China 227.66 17.2% 199.61 15.9% 217.43 61.8% 202.46 16.9% 169.67 15.1%
4.

Indonesia 105.58 8.0% 97.85 7.8% 67.21 5.2% 66.84 5.6% 101.53 9.0%
5.

Iran 3.50 0.3% 4.00 0.3% 2.50 0.2% 2.50 0.2% 1.70 0.2%
6.

Japan 0.70 3.1% 0.83 0.1% 0.75 0.1% 0.58 0.0% 0.50 0.0%
7.

Turkey 42.00 3.1% 30.00 2.4% 27.00 2.1% 24.90 2.1% 20.80 1.8%
8.

Kenya 216.99 16.4% 241.74 19.3% 263.40 20.3% 198.55 16.5% 244.23 21.7%
9.

Malawi 38.44 2.9% 42.73 3.4% 41.01 3.1% 49.22 4.1% 36.66 3.3%
10.

Others 185.04 14.0% 168.64 13.5% 182.00 14.0% 172.41 14.4% 131.30 11.7%
11.

Total 1322.49 100.0% 1252.6 100.0% 1296.48 100.0% 1200.6 100.0% 1126.09 100.0%
2 1
Source: ITC Report-2001

43
TEA PRODUCTION, EXPORT & EXPORT EARNINGS FROM BANGLADESH TEA SINCE
1973-74 TO 2002-2003
Production
Year Export (mkg) Export Earning (m taka)
(mkg)
1973-74 29.89 21.53 105.23
1974-75 31.28 23.50 190.79
1975-76 31.30 22.33 257.45
1976-77 35.64 29.42 558.76
1977-78 36.35 28.63 769.11
1978-79 36.70 27.10 620.79
1979-80 39.81 23.88 510.00
1980-81 41.90 29.85 664.76
1981-82 38.54 31.32 760.28
1982-83 42.86 30.81 1096.38
1983-84 39.46 30.74 1690.67
1984-85 42.89 25.85 1560.68
1985-86 38.77 29.82 973.10
1986-87 40.26 21.41 901.32
1987-88 41.62 27.56 1204.81
1988-89 41.27 25.12 1263.45
1989-90 42.56 22.57 1283.00
1990-91 44.61 26.45 1523.61
1991-92 46.79 23.64 1230.76
1992-93 49.30 33.09 1597.59
1993-94 51.73 27.42 1521.00
1994-95 47.04 26.72 1241.45
1995-96 52.14 21.43 1176.03
1996-97 52.67 25.39 1311.18
1997-98 51.25 24.45 2032.29
1998-99 50.26 23.50 1678.29
1999-2000 50.22 12.61 825.73
2000-2001 53.41 16.53 1122.14
2001-2002 55.20 13.80 947.00
2002-2003 54.60 12.17 870.91

Source: Bangladesh Tea Board Annual Report 2004

WORLD TEA PRODUCTION-COUNTRY WISE


Name of 1997 1998 1999 2000 2001 2002 2003 2004
Country
Argentina 55,000 50,000 55,000 63,000 59,000 58,000 60,00 63,00
0 0
Australia 1,200 1,250 1,300 1,300 1,300 1,400 1,50 1,55

44
Name of 1997 1998 1999 2000 2001 2002 2003 2004
Country
0 0
Bangladesh 50,521 55,824 46,186 52,639 56,821 53,622 58,30 55,99
4 6
Brazil 5,000 4,000 3,083 3,544 4,427 4,561 4,80 4,90
0 0
Burundi 4,189 6,669 6,859 7,118 9,011 6,605 7,38 7,50
0 0
Cameroon 4,189 4,731 4,485 4,004 4,200 4,200 4,30 4,50
0 0
China 613,366 665,034 675,871 683,324 701,699 745,374 768,14 835,23
0 1
CIS/Russia 9,800 15,400 15,930 14,900 15,000 14,300 14,50 15,65
0 0
Ecuador 2,000 1,900 1,800 1,700 1,600 1,700 1,80 1,85
0 0
Ethiopia 3,600 4,000 4,200 4,500 4,600 4,700 4,80 4,70
0 0
India 810,031 874,108 825,935 846,483 853,710 826,165 857,05 820,21
5 6
Indonesia 153,619 166,825 161,003 162,586 166,868 162,194 169,81 164,81
9 7
Iran 70,418 65,319 68,501 44,233 59,000 49,500 58,05 55,00
1 0
Japan 91,211 82,609 88,512 89,309 90,371 83,677 91,93 100,26
0 2
Kenya 220,722 294,165 248,818 236,286 294,631 287,102 293,67 324,60
0 9
Malawi 43,930 40,360 38,469 42,114 36,770 39,185 41,69 50,09
3 0
Malaysia 6,200 6,300 6,246 5,642 5,413 5,060 4,04 4,50
0 0
Mauritius 1,787 1,488 1,473 1,309 612 1,382 1,43 1,48
6 2
Mozambique 1,600 1,600 1,800 2,500 3,000 3,000 3,20 3,10
0 0
Myanmar 66 61 62 64 65 70 7 8
5 0
Napal 7,000 7,000 7,200 7,500 7,700 7,900 8,00 8,20
0 0
Papua New 7,000 5,500 6,200 6,200 6,100 6,200 6,40 6,50
Guinea 0 0
Peru 2,500 2,400 2,400 2,500 2,600 2,700 2,70 2,75
0 0
Rwanda 13,228 14,850 12,970 14,391 17,809 14,948 15,48 14,19
4 1
South Africa 8,207 10,845 10,570 10,612 10,734 11,650 10,93 5,69
2 4
Sri Lanka 277,428 280,674 284,149 306,794 296,301 310,604 303,25 308,08

45
Name of 1997 1998 1999 2000 2001 2002 2003 2004
Country
4 9
Taiwan 24,154 22,641 22,555 20,349 19,837 20,345 21,00 21,00
0 0
Tanzania 22,475 24,333 23,490 23,897 24,745 27,511 29,48 30,68
2 8
Turkey 139,523 177,838 170,563 130,671 142,900 142,000 155,00 165,00
0 0
Uganda 21,075 26,422 24,730 29,282 33,255 33,831 36,47 35,70
5 6
Vietnam 52,200 56,600 65,000 70,000 80,000 88,000 93,00 95,00
0 0
Zaire 2,500 2,500 2,500 2,500 2,600 2,700 2,80 3,00
0 0
Zimbabwe 17,098 17,755 20,411 22,489 22,382 22,544 21,973 18,734
Total 2,742,837 2,991,001 2,908,271 2,913,740 3,035,061 3,042,730 3,152,993 3,233,585

(Source: Bangladesh Tea Board website www.btboard.gov.bd)

BLACK TEA CONSUMPTION IN THE WORLD

World black tea consumption is projected to increase from 1.97 million tonnes in 1993-95 to
2.67 million tonnes by 2005, an annual growth rate of 2.8 percent. Developing countries would
account for the largest part of the prospective increase, with consumption rising from the 1993-
95 average of 1.41 million tonnes to 1.95 million tonnes by 2005, an annual growth rate of 3.0
percent. Black tea consumption in India is projected to continue to rise rapidly, reaching 832 000
tonnes by 2005, an annual growth of 3.2 percent from the base period. In other major markets
for black tea such as Pakistan, the Islamic Republic of Iran and Egypt, consumption is projected
at 160 000 tonnes, 122 000 tonnes and 90 000 tonnes by 2005, respectively. The reduction of
import tariffs and declining prices could have a more pronounced effect on consumption in these
countries. The projections also suggest significant increases in black tea consumption in other
developing countries, such as Turkey where consumption would grow at an annual average rate
of 3.2 percent to 150 000 tonnes.

In developed countries, including countries in transition, black tea consumption would increase
more moderately by 2.2 percent annually, to 719 000 tonnes in 2005. Consumption in the
European Community is projected to increase only slightly in the next decade since higher
purchases by France, Germany, Italy and the Netherlands would be largely counterbalanced by
a continuing decline in the United Kingdom. Consumption in the United States is projected to
increase, though at a relatively slow rate of less than one percent. Since many developed
countries impose no, or only slight, restrictions on bulk and packaged black tea imports, the

46
effect of trade liberalisation on their consumption would be negligible. Black tea consumption in
the countries of the former USSR is projected to increase from 154 000 tonnes in 1993-95 to
250 000 tonnes in 2005, equivalent to an annual growth rate of 4.5 percent over the period.

47
Per Capita Consumption of Tea in Different Countries
Consumption in mkg
Sl.
Country 1994-96 1995-97 1996-98 1997-99 1998-2000
No
1. UK 2.46 2.46 2.51 2.44 2.33

2. Ireland Republic 3.17 3.23 2.95 2.78 2.69

3. Bangladesh 0.19 0.20 0.23 0.25 0.27

4. Afganistan 1.34 1.68 1.74 1.22 1.01

5. Bahrain 1.32 1.20 1.22 1.21 1.16

6. India 0.62 0.65 0.63 0.63 0.64

7. Iran 1.25 1.43 1.52 1.55 0.58

8. Japan 1.04 1.08 1.08 1.07 1.08

9. China 0.34 0.34 0.34 0.36 0.36

10. Pakistan 0.85 0.78 0.75 0.78 0.82

11. Turkey 1.90 1.80 2.13 2.40 2.56

12. Sri Lanka 1.29 1.29 1.29 1.29 1.28

13. Saudi Arabia 0.80 0.80 0.86 0.82 0.80

14. Kenya 0.44 0.43 0.39 0.41 0.37

15. Libya 2.14 2.38 2.43 2.63 2.44

16. Egypt 1.17 1.25 1.16 1.18 0.24

17. Morocco 1.26 1.25 1.27 1.33 1.40

18. Tunisia 1.15 1.10 1.24 1.25 1.25

19. Australia 0.95 0.90 0.90 0.83 0.80

20. New Zealand 1.23 1.15 1.12 1.04 1.03

21. USA 0.34 0.32 0.33 0.33 0.34

22. Canada 0.46 0.48 0.53 0.57 0.58

23. Qatar 2.24 2.20 2.30 2.37 2.21


Source: ITC Report-2001

48
Tea Imports for Consumption
Qty. in mkg
Sl.
Geographical Region 2000 1999 1998 1997 1996
No
1. Asia 338.54 325.32 352.76 302.51 320.41
2. Europe 431.32 448.00 435.94 463.42 425.43
3. Africa 224.69 216.53 218.71 223.23 190.12
4. North America / West Indies 107.45 112.48 115.08 99.71 103.93
5. Latin America 14.68 16.81 17.24 15.03 16.77
6. Oceania 19.72 19.18 21.78 20.48 23.23
Major Tea Producing
7. 90.20 76.98 71.37 71.32 65.11
Countries
Total 1226.60 1215.30 1233.10 1195.70 1145.00
Source : a) ITC Report-2001 b) PDU, BTB.

Consumption of Tea in Different Countries


Consumption in mkg
Sl.
1994-96 1995-97 1996-98 1997-99 1998-2000
No Country
1. UK 144.29 145.00 148.42 144.71 139.22
2. Ireland Republic 11.41 11.36 10.82 10.28 10.08
3. Bangladesh 22.53 25.00 29.02 30.67 33.67
4. Afghanistan 26.37 34.30 36.27 26.00 22.07
5. Bahrain 0.77 0.72 0.76 0.77 0.78
6. India 579.67 615.33 597.33 615.00 633.67
7. Iran 85.28 85.93 92.60 95.60 93.00
8. Japan 131.05 136.41 135.60 135.70 136.84
9. China 420.28 420.43 428.64 446.24 461.33
10. Pakistan 110.99 104.43 103.04 102.05 110.23
11. Turkey 115.07 112.55 132.94 152.24 164.97
12. Sri Lanka 23.34 23.59 23.88 24.20 24.37
13. Saudi Arabia 14.57 15.03 16.83 16.60 15.93
14. Kenya 13.54 13.73 12.87 11.82 10.83
15. Libya 11.57 13.30 14.07 14.07 13.33
16. Egypt 67.29 74.30 69.46 72.20 77.03
17. Morocco 33.35 33.68 34.68 37.01 39.43
18. Tunisia 10.32 10.01 11.38 11.65 11.82
19. Australia 17.14 16.57 16.62 15.54 15.27
20. New Zealand 4.35 4.10 4.20 3.93 3.92
21. USA 89.52 84.55 89.01 90.24 92.59
22. Canada 13.62 14.42 15.78 17.37 17.73
23. Qatar 1.23 1.23 1.31 1.28 1.30
Source: ITC Report-2001

49
MAJOR TEA IMPORTING COUNTRIES FROM BANGLADESH

Three countries in South Asia -- Bangladesh, India and Sri Lanka -- account for 52 per cent of
global black tea production, 42 per cent of exports and 36 per cent of consumption. The tea
industry in the region also provides year-round employment to about 1.5 million workers --
mostly women -- and an equal number depend on tea-related ancillary activities for their
livelihood. Yet South Asia's predominance in the tea world is on the decline, with many of the
old fields in need of replanting, processing facilities requiring modernization and welfare
structures calling for upgrading. At global level, the tea industry is finding it increasingly difficult
to make ends meet, caught between rising costs on the one hand and stagnant or declining
prices on the other. This problem is more acute in South Asia than in the relatively new tea-
growing regions of East Africa. International and intra-regional efforts aimed at improving the tea
market have met with little success, and a more practical option available to the industry is in
the realm of cost reduction. There is no doubt that the two crucial cost elements -- labour wages
and estate supplies -- are bound to rise, per se, but the thrust of this study is that these
increases could, within limits, be neutralized in terms of unit costs of production through
enhanced productivity. The focus here is not just on labour productivity but also on the other
production factors that are involved in the growing, manufacturing and marketing of tea.

As the world's second largest importer of tea, Pakistan has called for a single market in Asia for
the optimal utilisation of resources and expansion of the trade in the sub-continent.

Though India is the world's largest producer of tea at about 830 million kg per annum (2002),
the focus has been largely on the domestic market, which consumes about 685 million kg
annually.

With the Indian tea sector facing multiple crises on account of higher production cost, lower
prices and loss of two major exporting markets in Iraq and Russia this year, its stakeholders are
desperately looking at the Pakistan market in the light of the thaw between the two neighbouring
countries of late.

Pakistan Tea Association chairman Saeed Ahmed Khawaja told the Indian delegates at the
110th annual conference of the United Planters Association of South India in Coonoor on
Saturday that both the countries should strive towards one market for Asia or the sub-continent
to take advantage of the demand-supply scenario.

"For historical and political reasons, it is unfortunate that the Indian tea sector could not tap the
Pakistan market during the last three decades. As developing countries, there is no reason why
we cannot shed our differences and boost tea trade for mutual benefit," Khawaja stated.
50
In spite of Pakistan being a captive market with logistic and freight advantages across the
western border, the share of Indian tea in its market was a mere 3.7 million kg out of a total 140
million kg last year. Total imports were valued at $250 million in 2002.

Pakistan generally meets its tea requirements from Sri Lanka and Africa, especially Kenya,
overlooking the prospects of sourcing it from India due to strained political and economic ties.

"If Indian tea exporters have to make a dent in our market, they would have to focus on quality,
variety, branding and multiple blends to match its peers from Kenya and other African countries,
which have 90 per cent of the Pakistan market," Khawaja declared.

In Pakistan too, tea is facing tremendous competition from other beverages. "Hence it is crucial
that our trade teams join hands to market the product and increase the consumption," he added.

Moreover, in the absence of a free trade agreement between the two countries, Pakistan levies
high import tariff and other levies (55-60 per cent) on Indian tea, unlike on tea imports from
Bangladesh, Sri Lanka and Nepal, which share the remaining 10 per cent of the Pakistan
market. "Going by the current consumption trends, Pakistan is all set to overtake the United
Kingdom as the leading/largest tea importer by 2005. With the exit of the Taliban regime in
Afghanistan at the end of 2001, about 35 million kg of tea finds its way into the country from its
western borders through grey channels. Similarly, large quantities of Indian tea (bulk and loose)
are smuggled into Pakistan from across the porous border.

With a per capita consumption of 1kg per annum and twice of India, tea is still the most popular
and cheapest beverage in the neighboring country, where about 70 per cent of the 140-million
population dwell in the hinterland.

"Ironically, our government has been discouraging higher tea imports in the face of meager
foreign exchange resources by asking the people to drink less tea and imposing heavy duties.
None of these measures, however, have worked and tea continues to be in greater demand
than before among the masses," Khawaja claimed.

According to Mohsin Mansoor Saify, a member of the visiting Pakistani delegation, Pakistan
importers purchase Indian teas only when prices were lower and the product was available in
variety or blends. Capitalising on the improved relations between the two countries, the Indian
commerce ministry is drawing up a plan of action to step up tea exports to Pakistan. Additional
commerce secretary L V Saptharishi told the 9-member Pakistan delegation to convince its
government for lowering the tariff barriers on tea imports from India so that the trade could be
doubled every year.
51
India Tea Board chairman N K Das disclosed that normalisation of relations between the
countries would enable India to double its export to Pakistan to 6 million kg by the end of the
current fiscal year (2003-04) from 3.5 million kg during the last fiscal (2002-03).

A Pakistani delegation has expressed their satisfaction at the quality of tea here and showed
interest in importing increased amount of tea from Bangladesh. ‘After returning home, we will
urge our government to increase duty-free quota for import of more tea from Bangladesh,’ the
chairman of the Pakistan Tea Association, Mohammad Altaf, told New Age last week in
Chittagong.

Altaf led a seven-member delegation of the association that witnessed tea auction and visited
tea estates in Chittagong and Sylhet during its five-day stay in Bangladesh. He said Pakistan
has an annual demand for 168 million kg of tea, while its imports from Bangladesh stands only
10 million kg under duty-free quota, agreed in 2002. ‘Bangladesh tea has much more demand in
Pakistan. We’re ready to buy as much tea as Bangladesh can export,’ Altaf said.

During the visit, the Pakistan Tea Association inked a memorandum of understanding with the
Bangladesh Tea Association aiming to further boosting tea trade between the two south Asian
countries as well as removing bottlenecks in the shipment of tea. Altaf and his counterpart
Wahidul Haque signed the deal on behalf of their respective sides. The Pakistani tea trade
leader wants more trade with Bangladesh under a widened duty-free facility. He also observed
that the country’s tea sector has attained ‘tremendous improvements –from tealeaf to liquor.

The chairman of the Tea Traders Association of Bangladesh, Santanu Biswas, said that the
Pakistani delegation had evinced more interest in the quality tea. ’During discussions, we have
urged the delegation members to ensure right price for our quality tea,’ he informed, feeling that
Bangladesh tea export to Pakistan could surge if leading tea blenders and packers of that
country could be lured.

By virtue of being the top tea producer in the world, India is playing the lead in the formation of a
Tea Council with the seven Saarc countries as members.

The council, to be named Saarc Tea Council, will conduct joint marketing, research and also
look into other issues like setting minimum quality standards for exportable tea. Explaining the
rationale behind the tea council, officials of Indian Tea Association (ITA) said: "The seven nation
Saarc accounts for 60 percent of the world's black tea exports.

India is the largest producer and consumer of tea, Sri Lanka is the world's largest exporter while

52
Pakistan is the third largest consumer of tea. Nepal and Bangladesh are also into tea production
in a small way. So there is an immediate need to form a tea council to strengthen trade ties
among these nations."

Pakistan will play a crucial role in this council. Gautam Bhalla, executive director, Warren Tea
said: "Countries (except Nepal and Bangladesh) which are exporting tea to Pakistan are
required to pay a high import duty of nearly 30 percent. We would like to address this issue at
the Saarc Tea Council.

India should be allowed to send tea to Pakistan at a zero duty. At present, tea from Bangladesh
and Nepal has zero duty status in Pakistan. The council will facilitate Indian tea trade with
Bangladesh and Nepal." Pakistan consumes nearly 140m kg of tea, annually.
The country buys mainly from Kenya. In '05, Pakistan imported 9.3m kg of tea from India. The
Indian tea industry is also eager to take advantage of the South Asia Free Trade Agreement
(Safta) that came into effect on January 1, '06. The pact aims at reducing tariffs for intra-
regional trade among members.

Pakistan and India are to complete implementation by '12, Sri Lanka by '13 and Bangladesh,
Bhutan, Maldives and Nepal by '15. Senior industry officials said, "India is actively pursuing the
formation of the tea council as the country wants to take advantage of the Kenyan drought."
There is already a shortage of 40-50m kg of tea in Kenya following a severe drought. Indian
producers have firmed up plans to make major inroads in Pakistan -- one of the largest buyers
of Kenyan tea -- this year. They are trying to utilise the Saarc tea council platform for clinching
better deals with the Pakistan tea trade." A 13-member Pakistan tea delegation is visiting India
in April.

Bangladesh tea risks losing international market, thanks to congestion at transshipment ports
coupled with an increase in freight charges.

Now, a shipment of 3,000 tonnes of tea worth over Tk 20 crore for Pakistan remains stranded
because of congestion at Singapore and Colombo ports. The weekly tea auction in Chittagong
is also witnessing a downslide both in terms of price and demand. "The shipping problem has
put us into a difficult situation and we are worried about the huge stock of tea that we bought
from local auctions for exporting to Pakistan, a major buyer of Bangladesh tea," said Chairman
of Tea Traders Association of Bangladesh (TTAB) Feroz Ahmed. "The Karachi-bound shipment
remains stranded due to congestion at transshipment ports in Singapore and Colombo," he
added. "If the situation does not improve within the next 15 days, Bangladesh tea exporters will
fail to meet their shipment deadline. We may even lose our export market in Pakistan," Feroz
53
said. He said the TTAB has already started lobbying the government organisations including
Bangladesh Tea Board to do the needful to end the crisis. Ali Akbar, manager of a private tea-
exporting firm, said the increase in freight charges is also posing threat to tea export.

"Freight charges rose to US$ 925 for a 20-ft container from US$ 700 and US$ 1,400 for a 40-ft
container from US$ 750 only a month ago. Some tea traders now stopped buying tea from the
auction as they failed to keep pace with the increased freight charges," Akbar added.

Tea brokers said the weekly tea auction on Tuesday witnessed a downslide both in price and
demand due to shipping problems twined with sudden flooding in Dhaka.

Overall average price on Tuesday's auction stood at Tk 67.76 a kg down from Tk 68.68
recorded in the previous auction, brokers said.

Besides, 20.11 percent tea in the auction remained unsold while in the previous auction 10.83
percent tea was unsold, they said.

The latest Pakistani offer to enhance the duty-free quota margin in importing tea from
Bangladesh would not bring any trade benefit for Dhaka. Sources in the business circle told
UNB that the Pakistani decision to raise the duty-free quota margin from the existing 10,000
tons to 15,000 tons is virtually eyewash because Bangladesh is yet to achieve the target of
fulfilling the existing tea quota in the Pakistani market. Pakistan in the just concluded Joint
Economic Commission (JEC) meeting held in Dhaka on September 12 had positively responded
to Bangladesh’s plea for raising the duty-free quota margin for tea. In the agreed minutes signed
at the end the trade talks, the Pakistani side offered to enhance the duty-free quota of
Bangladeshi tea to 15,000 tons per annum. ‘It could be better to seek duty free access for other
Bangladeshi items to the Pakistani market… While we can’t meet the existing duty-free quota
for tea in Pakistan what was the use of raising it such product,’ said a top executive of Tea
Traders Association of Bangladesh (TTAB) preferring anonymity. Export Promotion Bureau
(EPB) sources said Bangladesh exported 11.06 million kg tea to some 27 countries in 2004-
2005.

Of the total, the country fetched US$ 10.75 million through exporting 7.5 million-kg (7,500-ton)
tea to Pakistan in 2004-2005 fiscal years. This was the highest volume of tea exported to the
Pakistani market in last five years, according to Bangladesh Tea Board sources.
Deputy Secretary of the Ministry of Commerce of Pakistan Waqar Ahmed Shah told UNB during
his visit to Dhaka that Bangladesh need to develop more tea estates to raise its tea export to
Pakistan.

54
“You have to develop more Sylhets… one Sylhet won’t be able to fulfill the demand of Pakistani
buyers,” he added. Referring to Kenya’s lead in the Pakistani tea market, he said that
Bangladesh provides only 8 percent of his country’s total tea demand while 60 percent came
from Kenya. Tea production in the country was recorded to be 53.62 million kg in 2002, 58.30
million kg in 2003, 56.02 million kg in 2004 and 24.73 million kg in January-July of 2005,
according to Bangladesh Tea Sangsad. Some 60 percent of tea produced in Bangladesh is
consumed domestically while the remaining 40 is exported.

PROSPECTS OF BANGLADESHI TEA IN THE INTERNATIONAL MARKET

Tea consumption in Bangladesh is increasing 3 per cent per annum but its production is
increasing 1 per cent only. If tea production was not increased Bangladesh would become a
tea-importing country after 2020. Bangladesh is now exporting 12,000 Metric Tons (MT) tea per
annum, which earns Tk 90 crore.

According to the Bangladesh Tea Board currently Bangladeshi tea gardens are producing
56,000 MT of tea per annum. Of this 12,000 MT is exported. Bangladesh’s current population
growth rate is 1.6 per cent. Experts consider that in 2020 Bangladesh’s population will reach to
18.10 crore. If the tea consumption growth rate continues, in 2020 tea consumption will reach to
6.50 crore kg while its production will reach only to 5.41 crore kg.

The government is considering framing of a 20-year strategic plan for development of the tea
sector and to increase its production. The project will cost Tk 867. 32 crore. Of them Tk 752
crore will be spent for implementation of strategic plan, Tk 64 crore will be spent for research
and other Tk 51 crore will be spent for trade and marketing strategy. The strategic plan
suggests that total land for tea production has to be increased to 69,000 hectares from existing
50,000 hectares. It also suggests that tea production per hectares is 1748 kg from 1176 kg has
to be increased as early as possible. It also recommends increase of quality of tea and to export
40 per cent of total tea production. Sources said that currently in Bangladesh 161 tea gardens
contain 11,4,288.26 hectares of land. Of them 50,226 hectares of land were used for tea
cultivation that is 44 per cent of total land of tea gardens.

Out of 161 tea gardens 26 were managed by foreign companies and those produce 50.50 per
cent of Bangladesh total tea production. Tea gardens that were managed by foreign companies’
are producing 1439 kg tea per hectares. On the other hand, 135 tea gardens were managed by
Bangladeshi tea companies. Tea gardens that were managed by Bangladeshi companies’
produce 622 kg tea per hectares.

55
Sources said that the tea gardens owned by Bangladeshi companies failed to increase its
production due to lack of plan, lack of modern technology and equipments. On the other hand
26 tea gardens owned by foreign companies produce large quantity of tea due to modern
technology and equipment and proper plan. Sources said that the proposed strategic plan would
be placed for approval soon. A meeting will be held soon with Planning Commission and other
concerned authorities in this regard for its pre-approval.

It may be mentioned here that Bangladesh exports tea to Pakistan, India, Afghanistan, Poland,
United Kingdom, Russia, Kenya, Iran, Kazakstan, United Arab emirates, Oman, Saudi Arabia,
Greece, Ukraine, Kirgizistan, Turkmenistan and Uzbekistan. Of them Pakistan is highest tea
consuming country in the world. Special handmade Orthodox tea produced by public and
private sector gardens of Bangladesh is expected to find its room permanently at the world
famous UK based super chain store Harrods Limited.

Bangladesh Tea Board (BTB) and tea industry sources said it will open up new avenues for
Bangladesh tea if the Harrods authority finally continues to show interest for marketing of
Bangladeshi tea to the clients.

Sources said for the first time, the Harrods Limited which was established by British tea
merchant Mr. Charles Henry Harrod, has organized an exclusive sale promotion fair for
Bangladeshi tea in London held from October 25 to November 6. The Harrods authority in its
brochure published on the occasion titled "The Finest Bangladesh Teas in the Finest British
Store" attempted to lure its clients to Bangladeshi products by describing “Bangladesh Tea -
Tantalising flavours from outstanding estates". "For the last few years we have been closely
following the developments in Bangladesh, a country more known for paddy fields and floods.
From a very small base Bangladesh has now become the world's fifth largest producer of tea,
exporting only small quantities to the United Kingdom" the brochure said.

Harrods displayed tea produced by four gardens of Bangladesh with finest quality having
special taste and flavour. The gardens are Dauracherra Tea Estate, Silloah Tea Estate, Kazi
and Kazi Tea Estate and the tea estate owned by the Bangladesh Tea Research Institute.
"Most encouraging and exciting thing was that whole chunk of the tea amounting 500 kilograms
imported by the Harrods were sold out within first few days of the sale" BTB Chairman Brigadier
General S A H M Tauhid told BSS.

He Quoted the Harrods men as saying that the Bangladeshi tea drew a huge response among
the elite customer circle. He said Harrods fetched prices three to four times high from it's

56
customers for per kilogram tea compared to their import prices and it also exported the
Bangladeshi tea to Japan through their marketing chain. "Some credit for inclusion of
Bangladesh tea at the posh business center in London must go to Mr. B. Rahman, a
Bangladeshi and Senior Buyer of Harrods who played a key-role in the whole affair" the BTB
Chairman said. After getting good response from the customers about the products, the
Harrods authority is now keen to import big quantity of Bangladesh- tea.

THE field and factory development project of the Bangladesh Tea Board (BTB), which is being
almost entirely funded by the UNs Common Fund for Commodities (CFC), marks a serious
effort by the Bangladesh Government to tone up the tea industry which is in a bad shape for a
long time. The project, the implementation of which is being spread over 10 years starting 2000-
01, takes into account the signs of increase in domestic consumption of tea due to population
growth and improvement in the socio-economic condition of the people. The authorities have
also kept in view the emerging opportunities for thrust on the marketing of tea, citing health
benefits brought to the fore in recent years by researchers in several countries. Currently, the
consumption of tea in Bangladesh is a low of 250 grams per capita.

A recent FAO document, which gives details of the present state of the industry in Bangladesh,
has observed that the major problem areas are low yield (1,158 kg per hectare), high cost of
production, low unit realisation, inadequate availability of finance and large tracts of unutilised
land.

Out of the 158 estates, 37 are either sick or they fall in the least developed garden category.
Although they account for 17 per cent of the area under tea, their share in production is just
three per cent. Twenty-four per cent of the plantations have very old bushes and because of the
large percentage of vacancy, their average yield is only 700 kg per hectare. This pulls down the
overall productivity per hectare.

Last year Bangladesh produced 54 million kg (mkg) of black tea (CTC), out of which the
domestic consumption was estimated at 36 mkg. Its exports were placed at 18 mkg.
Considering the gestation of the development project, the FAO document has placed its
production in 2010 at 62 mkg. But, domestic consumption is projected to grow at 45 mkg.
Availability for export will show a negative growth at 17 mkg. The development programme,
therefore, aims at preventing a situation wherein Bangladesh becomes a net importer of tea.

The cost of the project has been estimated at $17.4 million. CFC is to provide interest free loan
of $17 million. It will attract service charge of one per cent.

57
The objectives of the development-cum-rehabilitation project are: infilling in 2,200 hectares with
high yielding variety of clones; replantation in 3,000 hectares; to increase area under tea by
4,500 hectares; to procure new CTC machines and other equipment; to modernise factories
having very old machinery; to improve quality to international standards, keeping in view the
health benefits of drinking tea; to establish modern blending and packaging facility and; to
generate employment opportunities for unemployed/temporary tea estate workers as well as
dependents of tribals/ethnic minorities.

BTB hopes that achievement of the targeted productivity levels will enable the industry to
compete in the international market.

The government has taken up a programme to cultivate tea plants in an experimental basis in
the district with a view to increasing tea production in the country, reports BSS.

Bangladesh Tea Research Institute has already started its sub station at Tetulia to grow tea in
the area and under taken a project involving a budgetary allocation of Taka 3.3 crore for tea
gardens in Panchagarh.

Besides, a tea processing factory, tea development and tea expansion centre would be set up
here soon. European Commission (EC) has shown keen interest to invest in setting up tea
gardens in the district. EC will invest Taka 3.3 crore for three projects including set up of Tea
Board office, BTRI and producing tea plant.

The RAKUB will give loan of Taka 46,500 as financial support to the growers for preparing of
land, purchasing of tea saplings, fertilizers, insecticides, irrigation and labourers to produce tea.
Special handmade Orthodox tea produced by public and private sector gardens of Bangladesh
is expected to find its room permanently at the world famous UK based super chain store
Harrods Limited.

Bangladesh Tea Board (BTB) and tea industry sources said it will open up new avenues for
Bangladesh tea if the Harrods authorities finally continue to show interest for marketing of
Bangladeshi tea to the clients. Sources said for the first time, the Harrods Limited which was
established by British tea merchant Mr. Charles Henry Harrod, has organized an exclusive sale
promotion fair for Bangladeshi tea in London held from October 25 to November 6.

The Harrods authority in it's brochure published on the occasion titled "The Finest Bangladesh
Teas In The Finest British Store" attempted to lure it's clients to Bangladeshi products by
describing " Bangladesh Tea - Tantalising flavours from outstanding estates".

58
"For the last few years we have been closely following the developments in Bangladesh, a
country more known for paddy fields and floods. From a very small base Bangladesh has now
become the world's fifth largest producer of tea, exporting only small quantities to the United
Kingdom" the brochure said.

Harrods displayed tea produced by four gardens of Bangladesh with finest quality having
special taste and flavour. The gardens are Dauracherra Tea Estate, Silloah Tea Estate, Kazi
and Kazi Tea Estate and the tea estate owned by the Bangladesh Tea Research Institute.

"Most encouraging and exciting thing was that whole chunk of the tea amounting 500 kilograms
imported by the Harrods were sold out within first few days of the sale" BTB Chairman Brigadier
General S A H M Tauhid told BSS.

He Quoted the Harrods men as saying that the Bangladeshi tea drew a huge response among
the elite customer circle. He said Harrods fetched prices three to four times high from it's
customers for per kilogram tea compared to their import prices and it also exported the
Bangladeshi tea to Japan through their marketing chain.

"Some credit for inclusion of Bangladesh tea at the posh business center in London must go to
Mr. B. Rahman, a Bangladeshi and Senior Buyer of Harrods who played a key-role in the whole
affair" the BTB Chairman said. After getting good response from the customers about the
products, the Harrods authority is now keen to import big quantity of Bangladesh- tea.

The latest Pakistani offer to enhance the duty-free quota margin in importing tea from
Bangladesh would not bring any trade benefit for Dhaka. Sources in the business circle told
UNB that the Pakistani decision to raise the duty-free quota margin from the existing 10,000
tons to 15,000 tons is virtually eyewash because Bangladesh is yet to achieve the target of
fulfilling the existing tea quota in the Pakistani market.

Pakistan in the just concluded Joint Economic Commission (JEC) meeting held in Dhaka on
September 12 had positively responded to Bangladesh’s plea for raising the duty-free quota
margin for tea.In the agreed minutes signed at the end the trade talks, the Pakistani side offered
to enhance the duty-free quota of Bangladeshi tea to 15,000 tons per annum. “It could be better
to seek duty free access for other Bangladeshi items to the Pakistani market… While we can’t
meet the existing duty-free quota for tea in Pakistan what was the use of raising it such
product,” said a top executive of Tea Traders Association of Bangladesh (TTAB) preferring
anonymity.

59
Export Promotion Bureau (EPB) sources said Bangladesh exported 11.06 million kg tea to some
27 countries in 2004-2005. Of the total, the country fetched US$ 10.75 million through exporting
7.5 million-kg (7,500-ton) tea to Pakistan in 2004-2005 fiscal year.

This was the highest volume of tea exported to the Pakistani market in last five years, according
to Bangladesh Tea Board sources. Deputy Secretary of the Ministry of Commerce of Pakistan
Waqar Ahmed Shah told UNB during his visit to Dhaka that Bangladesh need to develop more
tea estates to raise its tea export to Pakistan. “You have to develop more Sylhets… one Sylhet
won’t be able to fulfill the demand of Pakistani buyers,” he added. Referring to Kenya’s lead in
the Pakistani tea market, he said that Bangladesh provides only 8 percent of his country’s total
tea demand while 60 percent came from Kenya.

Tea production in the country was recorded to be 53.62 million kg in 2002, 58.30 million kg in
2003, 56.02 million kg in 2004 and 24.73 million kg in January-July of 2005, according to
Bangladesh Tea Sangsad. Some 60 percent of tea produced in Bangladesh is consumed
domestically while the remaining 40 is exported.

Bangladesh tea witnesses a better market this year with the increase of both price and demand
amid a rise in output despite a fall in its export, tea officials here said. They added that tea
prices increased by Tk 11 per kilogram on an average this season compared with that of the
previous season. In the first 21 auctions of the current season, 24 million kilograms of tea were
sold with an average price recorded at Tk 76 per kilogram as against 21 million of tea sold with
an average price of Tk 65 per kilogram during the same number of auctions in the previous
season, they informed.

Tea auction is held in the port city of Chittagong once in every week while tea auction season
begins from April and ends in March the next year. ‘Price of tea jumped this time because of
huge demand from home buyers particularly local packeteers and blenders who are in a race to
capture internal market,’ said an auction official Subir Das. ‘Foreign buyers also from Pakistan
and Afghanistan took part in the auctions here’ he added. According to official reports here,
Bangladesh in the first eight months from January to August this year produced 33 million
kilograms of tea up from 31 million kilogram produced in the previous year (2004) in 156 tea
gardens.

But export of Bangladesh tea in the first seven months (January to July) of this year was
recorded at 4.43 million kilograms, down from 5.48 million kilograms exported during the same
period of previous year, official reports said.

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Talking to New Age, Nabi Hossain, deputy director of state-owned Bangladesh Tea Board said,
‘Our export of tea is gradually sliding as the demand for home market and the price increased
so much that export buyers could not compete with local buyers’. ‘We think that in future there
may not be any tea left for export from Bangladesh with more increase of home demand unless
the production is raised,’ Nabi said adding that most of the tea out of over 50 million kilograms
produced annually in Bangladesh are consumed in the internal market’.

In 2004 Bangladesh exported 13 million kilograms of tea while 42 million kilograms were
consumed in the internal market, official reports said. Feroz Ahmed, former chairman of the Tea
Traders Association of Bangladesh, said, our internal consumption is increasing every year. So
we don’t know, after ten years, whether we will have tea left for export if the production cannot
be raised.’

Bangladesh tea which was exported to 25 countries of the world ten years ago, now finds
buyers only in Pakistan, Afghanistan and CIS countries, tea sector sources said.

Bangladesh joined in ‘organic tea club’ by marketing the first ever organic tea produced by the
‘Kazi and Kazi Tea Estate’, the only tea garden in the country’s northern region.
The tea with the brand name ‘Meena’ was launched today (Thursday) in the market at Meena
Bazar, a modern departmental store, in city’s posh Dhanmondi residential area. At a launching
ceremony, Kazi Jamil Islam, Consultant of Meena Bazar, said that the tea is similar to world
famous ‘Darjeeling Tea’ in taste and flavour.

Moreover, being produced in the virgin land of Tetulia, the ‘Meena Tea’ is free of any harmful
chemical fertilizer and chemical-free cow dung is the only natural fertilizer used for producing
this tea, he said.

BANGLADESH TEA MARKET

The tea market in Bangladesh has had its ups and downs. Natural disasters, the domestic
market, and the state of buying countries have all been factors in Bangladesh tea’s value.

Owing to an unprecedented drought prevailing well into the middle of the 1999/2000 season,
quality was well below average for the country until July 2000. At that time, tea was brownish
with thin liquors, but thereafter an improvement was noticeable, particularly in cup character.
Puja quality was also quite fair. However, towards the end of the season, there was quite a
sharp fall.

61
Up until May 2000, crop figures from other producing countries showed an increase in crop from
the very low figures of 1999 and only a shade lower than the massive production in 1998. These
figures gave Bangladesh very little scope for optimism about prices for the current season’s
teas. We have seen how, in 1999, despite very large deficits in crop, instead of moving up,
prices actually went down, particularly for Bangladesh tea.

We believe that this was caused by a lack of sufficient export orders owing to an abundance of
plain teas. The scenario may not change for the better during the current season, and demand
from export markets could be sluggish. If we examine our overseas markets, especially
Pakistan, we may find that we have to compete with a host of countries such as Indonesia,
Malawi, and even Vietnam, to sell our product at ever declining prices. These countries are
keen sellers and offer their tea at prices that are often lower than those for teas of a similar
quality from Bangladesh.

We also understand that other importing countries such as Russia and CIS are well stocked
with teas, so these buyers are likely to be less active during the current season than during
1999/2000. Similarly, Poland is very well stocked with cheap South Indian teas. In short,
demand in our auctions may be sluggish for the best part of the current season and prices may
fall to unremunerative levels.

Having drawn this gloomy scenario, we feel that internal demand is likely to play a more
dominant role in the market. Our domestic consumption has now grown in excess of 30 million
kg and is steadily rising, mainly due to the fact that the middle class income is steadily rising
while the numbers of desperately poor people are, according to government statistics, declining.

During the 2000/2001 season, consumption could further increase to 32 million kg. or more,
provided that consumers are supplied with a better quality tea. Fortunately, the rising popularity
of branded products is having a beneficial effect on demand for good liquoring teas and more
and more estates are trying to produce a good cup quality in order to cater to the requirements
of blenders. Loose tea buyers are also paying more attention to cup quality than before. We
therefore soundly believe that well-made grades with strong, bright liquors will attract higher
demand from our internal buyers at more remunerative prices. We may well see a very sharp
price differential between good and plain teas and, while the former may fetch higher prices, the
latter could be mostly neglected and if sold at all realize poor prices. The key, therefore, to
survival in 2000/2001, is quality!

62
Demand for Bangladeshi Tea
On the whole, demand was sluggish for most of 1999 as export markets were much less active
than during the previous season. However, internal buyers lent good support and absorbed the
bulk of the offering in the initial auctions at progressively lower rates and, as the season
progressed to the end of July 1999, demand slackened quite considerably and withdrawals in
the auctions were fairly heavy. This declining trend was reversed in August when strong export
interest and more widespread demand from the internal buyers greatly improved the market
segment and consequently the prices at the auctions. These buyers lent fairly good support
during October and November and there was progressive improvement in their activities during
December.

Demand slackened at the beginning of 2000 with a heavy weight of teas on offer in the auctions.
February began with a similar tone but soon improved and all sections of the market, especially
the export market, lent some good support despite the large offerings. The last few sales of the
1999/2000 season mainly comprised end of season types but the few good invoices attracted
useful support from the internal market. Export inquiries were limited.

Since the new season’s sale that began in late April 2000, demand has been restricted for about
six weeks to only well-made, bright-liquoring teas and, as a result, quite a lot of poorly-made
teas were neglected and remained unsold. However, a better demand was seen in the following
months, and most of the unsold teas of poor quality, along with an increased weight of better
quality teas, were absorbed by the local buyers to satisfy internal demand. Export buyers began
to appear in the market from the end of July and their activities gathered energy from August,
contributing to a firm demand which lasted until the end of November 2000.

The Market

The first sale of the 1999/2000 season, held on May 11, 1999, was marked by a strong demand
from the internal buyers at prices well over the closing rates, the average price being Tk. 80.18.
However, price levels gradually declined in subsequent sales owing to lack of export enquiry. By
Sale no. 10, held in the middle of July, the average price had registered a sharp drop and stood
at Tk. 53.25 per kg as against Tk. 62.96 per kg for the same sale of the previous season.
However, a firm market at this level prevailed up to the end of September. A much stronger
demand was witnessed from the last week of September but export inquiries were sharply lower
from November onwards following lack of competition. From the first week of December 1999, a
much stronger market prevailed following increased buying by internal and export buyers mainly
from Russia, CIS, Pakistan, and Poland. Afghanistan also re-entered the market and, for a few
weeks, operated very strongly for well-made Brokens at satisfactory levels. As a result, rates

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improved quite appreciably and by the end of December, the average price for the last sale of
the century recorded an average price of Tk.62.37.

The year 2000 started with an easier market and prices declining by an average of Tk.2.50/- per
kg. The market improved for a short spell in February when all sections showed an active
interest.

In the market for the season 2000/2001, tea witnessed a fair activity until the end of June,
mostly from internal buyers, but when the auction offerings increased in July, prices eased due
to a lack of sufficient export demand. There was an improved demand in August and generally,
prices moved upwards. This trend was maintained in September and stayed firm until the last
week of the year.

Buyers
Internal buyers, from both the loose tea section and the packeteers, were the principal operators
at the auctions and purchased a higher volume of tea than during the previous year. Poland,
Pakistan and Afghanistan bought much less tea during the 1999/2000 season, but Russia
bought an increased weight from this center. Kazakhstan operated in greater strength but all
other export markets, notably Iran and Sudan, were much less active.

Since the start of the new season, Pakistan has dominated the market and shipments until the
end of September 2000 to that country amount to 6.2 million kg, as against 2.5 million in the
previous season. Afghan buyers come second to Pakistan and, although they started to operate
only from August, their presence has been strongly felt, especially in the market for well made
Brokens and Fanning. Poland has been virtually absent while Russian buying was negligible.
CIS lent less support than during the previous season.

The internal loose tea buyers were quite active in the first few weeks of the new season’s
auctions but only moderately so in the subsequent months. On the other hand, the internal
blenders were active throughout and bought more tea than in the similar period last season.

MAJOR COMPETITORS IN TEA MARKET

South Asia has a predominant stake in the global tea economy. Three countries -- Bangladesh,
India and Sri Lanka -- account for 52 per cent of world black tea production and 42 per cent of
the export trade. These countries, with a population of 1,200 million, account for 36 per cent of
world tea consumption.

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Sri Lanka has possibly the world's highest cost of tea production at an estimated US$1.47 per
kg in 1994, compared with US$1.09 per kg for India and US$1.15 per kg for Bangladesh. The
cost is reportedly even lower, at US$0.96 per kg, for the estate sector in Kenya.

Table 1. South Asia: Black tea production and exports, 1991-94 (million kg)
Production Exports

1991-93 1994 1991-93 1994


Average Estimate Average Estimate

Bangladesh 47 53 28 24
India 727 744 182 149
Sri Lanka 217 242 196 230
South Asia 991 1 039 406 403
World 1 909 1 934 971 954
South Asia's share (per cent) 52 53 42 42
Source: FAO. (Food and Agricultural website www.fao.org)

Medium-term projections clearly point to India and Sri Lanka continuing to retain their leading
position in production and exports, respectively, with Pakistan emerging as the world's largest
importer, surpassing both the United Kingdom and the Russian Federation. The likely position
by the year 2005 could be as indicated in table 2.

Table. Projected tea production, 2005 (million kg)


South Asia World South Asia's share (per cent)

Production 1 355 2 811 48


Exports 539 1 435 38
Consumption 1 043 2 727 38
Source: FAO. (Food and Agricultural Website www.fao.org)

Whether in Asia or Africa, however, the tea industry's problems are intrinsically the same --
rising costs and stagnant or declining prices. The importance of these factors varies. As far as
prices are concerned, global efforts, through FAO and UNCTAD, to maintain prices have met
with little success. A recent initiative by Sri Lanka led to the establishment of the International
Tea Producers' Forum, but efforts by the Forum to lift sagging world prices will take a long time
to bear fruit. Within the region, the South Asian Association for Regional Cooperation (SAARC)
has been negotiating a South Asian Preferential Trading Agreement (SAPTA) as well as a
South Asian Free Trade Agreement (SAFTA). Progress has been slow in contrast to the
success achieved by other trading blocs, such as the European Union, NAFTA and APEC.
Meanwhile, world tea prices fell for the fourth successive year, the overall decline in US dollar
terms for 1994 being about 7.7 per cent over 1993. There were, however, considerable regional

65
disparities. While the average price at the Mombasa (Kenya) auction increased by 3.5 per cent,
there was a substantial decline in the principal centres in South Asia -- 12.9 per cent in Calcutta
(North India), 22.1 per cent in Cochin (South India), 8.5 per cent in Colombo (Sri Lanka) and
15.8 per cent in Chittagong (Bangladesh).

For the first time since the Tatas took over the Tetley group, the company is on an expansion
mode. Tetley is entering into three joint ventures in Russia, Pakistan and Bangladesh, three of
the largest tea-drinking countries, as part of a plan to expand its global presence.The
investments in these ventures will be through Tata Tea (Great Britain), the holding company of
Tetley. All the three companies, which will be owned equally with local firms as partners, will
blend tea locally for the respective markets.

A senior Tata group official said: “Tata Tea (Great Britain) will be entering into equal
partnerships with local partners. We are in the final stages of discussions and the deals will be
signed soon.” Tata group officials, however, declined to reveal investment details.

The expansion strategy is critical in increasing Tetley’s earnings potential because Tata Tea has
leveraged the company’s future cash flows to fund Tetley’s £271-million acquisition. Since then,
the Tatas have had to infuse another £30 million, for debt reduction and other recast activities,
in the company to bring it back on the rails. Although Tetley is the single largest tea brand
worldwide, it trails way behind the Unilever group’s tea brands. But the global tea market still
remained fragmented, offering a huge opportunity, a Tata source said. Tetley will also shift its
focus from black tea to higher-value added products such as flavoured teas, green teas and
herbal teas. In 2001-2002, Tetley increased its market share to 25 per cent in the UK, the
worlds largest tea market, against Unilevers PG Tips 23 per cent, while Premiers Typhoo had a
share of 6 per cent.

In Canada, Tetley had a 43 per cent marketshare in tea bags, while Unilevers Red Rose had 19
per cent, and Salada, another Unilever brand, had 9 per cent in 2001-2002. The UK and
Canadian markets have been powerful contributors to the Tetley groups’ profits.

Tetley has also rationalised its manufacturing facilities. Tetley currently had five production
centres: one in the UK, two in the US, one in Australia and one in India. However, the group
closed the Greenford factory, a small facility in the UK. By containing costs, it saved over £1
million on packaging and overheads.

World tea production continued to reach new highs in 2004, when output grew by 2 percent to
reach an estimated 3.2 million tonnes, according to an FAO report prepared for the

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Intergovernmental Group on Tea meeting in Bali (20-22 July 2005) to review the current world
tea market and its medium-term outlook.

The expansion in production was due mainly to the increases recorded in Turkey, China, Kenya,
Malawi, Sri Lanka and Indonesia. The growth in output from these countries more than offset
declines in other major producing countries, including India and Bangladesh.

In China, tea output for 2004 approached the 800 000 tonnes milestone as policy initiatives to
promote production and trade of tea began to have an impact on the sector.

In Sri Lanka, production increased slightly by 1.3 percent to 309 000 tonnes in 2004, reflecting
the recovery from crop losses after devastating floods in low grown tea areas of the island in
2003. In Indonesia, where a 1.2 percent growth was recorded, output reached 170 000 tonnes
in 2004.

In Turkey, production was reported to have expanded dramatically in 2004 as output increased
by 32 percent to reach around 205 500 tonnes, due to higher yields.

Tea production in Kenya increased by more than 11 percent in 2004 to reach 328 000 tonnes,
as a result of favourable weather in most of the growing regions and the expansion in
processing capacity. Malawi also reported a significant increase of 19 percent in tea production
with output reaching 50 000 tonnes.

In India, tea production declined by 4.3 percent to reach around 820 200 tonnes due to
unfavourable weather conditions and the closure of up to 70 tea gardens in Assam.
World tea exports increased by 4.4 percent in 2004 to reach 1.47 million tonnes, as shipments
from all major exporting countries increased during the year. Kenya was the largest exporter,
once more surpassing Sri Lanka. The 8.9 percent increase in exports from Kenya brought total
shipments for the year to almost 293 000 tonnes. A similar increase (8.9%) was also recorded
by Indonesia.

Tea exports from China expanded by more than seven percent to reach 282 000 tonnes, and
were dominated by green tea, which accounted for more than 75 percent of its total exports.

World net tea imports continued to increase in 2004, by 1.5 percent, reaching 1.42 million
tonnes. This trend reflected the increases in traditional developed country markets of the
European Community (an increase of 2.4 percent), the United States (5.3 percent) and Japan (2
percent), where imports reached 215 000 tonnes, 99 000 tonnes and 56 000 tonnes,
respectively.
67
Most of the growth in these markets is reportedly in response to promotional efforts on the
health benefits of tea consumption. Available evidence from medical research suggests that
moderate consumption of tea offers protection against heart and blood vessel disease, some
cancers, and bacterial infections. In 2004, tea prices opened at US$1.56 per kg in January and
closed at US$1.73 per kg in December, reflecting an improvement on the demand side,
according to FAO.

A recent study on the market evolution between 1993/1995 and 2001/2003 indicated that, out of
27 agricultural commodities, tea showed the second lowest variability in prices: 2% decline
compared to 39% for cocoa and 38% for coffee.

"Recent developments in the world tea market suggest that the major players have succeeded
in bringing the market towards balance," said David Hallam, Chief, FAO Raw Materials, Tropical
and Horticultural Products Service. "Demand has been stimulated in the major producing
countries themselves, notably for black tea, and supply has been tailored to market
opportunities," Mr. Hallam added.

The meeting of the Intergovernmental Group on Tea will be preceded by the International Tea
Business Conference (18 - 19 July 2005) which will take place at Bali's International Convention
Centre.

India produced 826 million kg of tea in 2002, representing approximately 30% of the world’s tea
supply. However, the Indian tea industry faces considerable difficulties. Domestically, the retail
price of tea is depressed by oversupply, as reflected in the sharp disparity in growth between
volume (+28%) and value (-10%) in the retail market between 1998 and 2003.

This problem was exacerbated by the government lifting quota restrictions on commodity
imports in 2001, resulting in an increase in cheap, low-quality tea from neighbouring countries
such as Nepal, Vietnam and Indonesia. As is frequently the case with staple products, the
resultant drop in the price of tea has not equated to a rise in consumption.

Furthermore in its export markets India is threatened by newcomers, such as Indonesia and
Vietnam, as well as old rivals such as Sri Lanka and Kenya. The combination of these factors is
squeezing margins and leading to a large accumulation of excess stock within the industry.
Consequently major Indian tea manufacturers are now looking at international expansion into
new markets with the aim of increasing sales and raising the profile of their brands.

68
India: the largest tea consumer
India consumes the largest quantity of tea in the world, accounting for nearly 14% of global retail
volume sales. Geographically, tea is widely consumed in the North, East and West of India, and
is popular with a wide variety of social classes and consumer age groups.

However, it ranks 7th in value terms, due to relatively low unit prices. Black standard tea
constitutes nearly 80% of value sales, although green tea has seen its popularity rise.

Still heavily promoted to defend from alternatives


Despite, and probably because, tea is the most traditional and affordable beverage in India, it is
perceived as being old fashioned and less functional than some substitute products.

For instance, malt-based beverages such as Horlicks (GlaxoSmithKline) and Bournvita


(Cadbury Schweppes), are the favourite type of hot drink in the South, and are also the fastest
growing. This drink is consumed as a substitute for milk in this milk-deficient region, and is
favoured for its functional benefits.

Furthermore, in the south, coffee is bigger as a proportion of total hot drinks than in the rest of
the country. Local preferences are different in the south, India's main coffee-producing region.

Soft drinks such as carbonates also represent a significant threat to the ongoing dominance of
tea in the longer-term, with aggressive marketing campaigns from leading multinationals
successfully persuading many young consumers to migrate from tea to soft drinks for various
drink occasions.

The industry has therefore launched a series of campaigns to promote tea as a health drink,
with celebrities and scientists invited to endorse the health benefits of tea, while the Tea Board
and leading players such as Unilever and Tata Tea have set up a fund of Rs 200 million to
promote tea drinking. The recent pesticide controversy of carbonated drinks provided a good
opportunity for tea marketers to promote the natural aspects of the drink.

Unilever: the clear market leader

The packaged tea market is highly consolidated in India, with Unilever and Tata Tea accounting
for almost half of retail value sales. Unilever (Brooke Bond and Lipton) is the clear leader,
holding over 30% of the market share, while Tata Tea (Tata) trails it with almost 20%. The
remainder of the market is far more fragmented and shared between numerous small players

69
Both Unilever and Tata Tea saw a fall in retail sales as a direct result of the drop in the price of
tea between 2000 and 2003. These mainstream players also saw their margin squeezed in the
face of increased advertising spends and competition from unpackaged tea.

Tata Tea: ambitions in international markets

Tata Tea is the largest vertically integrated tea firm in the world, from its plantation activity
through to its packaging and marketing initiatives. Although Tata Tea is overshadowed by
Unilever in its domestic market, the company has been the star performer in the global tea
industry in recent years.

Its high profile acquisition of the global Tetley brand in 2000 effectively consolidated its position
in the international tea market. The company is now seeking to leverage the brand as a
springboard to new markets. In 2003, Tata Tea started retailing its flagship brand Tata Tea in
the US.

The company closed a factory in Australia in the same year in order to increase the capacity of
its Sri Lankan joint venture packaging company, which serves the Australian, Polish and
Russian tea markets. It is currently looking into marketing Tetley in the Chinese market.

Cha bars: premium tea as a lifestyle choice


Retail value sales of tea in India are expected to show positive growth of 2.5% during 2003-
2008. Euromonitor anticipates the future development of the industry is will be impacted by out-
of-home consumption. A new development has been the opening up of the vending machine
sector. The total number of vending machines in the country was estimated at 45,000 in 2003,
which included a large number of unbranded machines. Vending machines sell coffee, tea and
soft drinks, however, so for the tea players it could be a double-edged sword.

In addition to vending, the development of cha bars and coffee shops will encourage out-of-
home consumption. Cha bars offer a wide selection of teas at premium prices and are
considered fashionable among a certain Indian demographic. Hoping to emulate the success of
coffee shops witnessed in many major cities, including in emerging markets, they mainly target
expatriates, the corporate entertainment market, or high income locals keen to show individual
tastes.

INSTITUTIONS INVOLVED IN TEA SECTOR


Tea Boards
Bangladesh Bangladesh Tea Board
171-172, Baizid Bostami Road
Nasirabad, Chittagong
India Tea Board Of India
14 Biplabi Trailokya Maharaj Sarani
Calcutta

70
Indonesia Indonesian Tea Board
Jakarta
Kenya Tea Board of Kenya
Tea Board House, Nairasha Road
Post Box No.20064, Nairobi
Malawi Tea Board of Malaw
Limbe
Sri Lanka Sri Lanka Tea Board
574, Galle Road
Colombo-3

ITC Member

Full Producer/Exporter members


Tea Board of India Sri Lanka Tea Board
14 BTM Sarani (Brabourne Road) P O Box 1750
Kolkata 574 Galle Road
700 001 Colombo 3
India Sri Lanka

Telephone: 91 33 2235 1411 / 1412 / 1413 Telephone: 94 1 583687 / 587773 /


Fax: 91 33 2221 5715 587814 / 582236
Cables: TEEBORD Fax: 94 1 589132
E-mail: devbasu@vsnl.com E-mail: teaboard@pureceylontea.com
Web Site: www.pureceylontea.com
Representative: A K Sahu
Representative: Ranjit Abeykoon
Asosiasi Teh Indonesia The Tea Board of Kenya
Jalan Pulombangkeng Tea Board House
No.15 Kebayoran Baru Naivasha Road / Off Ngong Road
Jakarta Selatan 12110 P O Box 20064
Indonesia Nairobi 00200
Kenya
Telephone: 62 21 7260772 / 7393375
Fax: 62 21 7205810 / 7262912 Telephone: 254 20 572421 / 572497 /
E-mail: indotea@indosat.net.id 574445 - 6
Fax: 254 20 562120 / 576337
Representative: Insyaf Malik E-mail: teaboardk@kenyaweb.com
Web Site: www.teaboard.or.ke

Representative: Abraham K Barno


The Tea Association of Malawi Bangladesh Tea Board
Kidney Crescent 171 - 172 Baizid Bostami Road
P O Box 930 Nasirabad
Blantyre Chittagong
Malawi Bangladesh

Telephone: 265 1671182 / 1671355 Telephone: 880 31 682712 /681455 /


Fax: 265 1671427 682903
E-mail: taml@malawi.net 682096 / 682347 / 683527
Fax: 880 31 682863
Cables: TEABANGLA

71
E-mail: btb@spnetctg.com
Web Site: www. bdteaboard.com

Representative: M.S. Patwary


China Chamber of Commerce of Import
& Export of Foodstuffs, Native Produce &
Animal By-Products
21 Xitangzi Hutong
Wangfujing Street
Beijing 100006
China

Telephone: 00 86 10 65225171
Fax: 00 86 10 65139064
E-mail: chinatea@cccfna.org.cn
Web Site: www.agriffchina.com

Representative: Ms. Yalan Zheng

Full Consumer members


United Kingdom Tea Association Irish Tea Trade Association
6 Catherine Street 20 Terenure Park
London Dublin 6W
WC2B 5JJ Ireland
United Kingdom
Telephone: 00 353 1 490 3361
Telephone: 44 (0)20 7836 2460 Fax: 00 353 1 490 3101
Fax: 44 (0)20 7379 5735 E-mail: tealeaf@indigo.ie
Representative: Katy J Tubb
Reprentative: Arthur Fitzpatrick

Tea Association of the U S A Inc Tea Association of Canada


420 Lexington Avenue, Suite 825 885 Don Mills Road
New York Suite 301
NY 10170 Don Mills, Ontario
USA M3C 1V9
Canada
Telephone: 1 212 9869415
Fax: 1 212 6978658 Telephone: 1 416 510 8647
E-mail: simrany@teausa.org Fax: 1 416 510 8044
E-mail: louise.roberge@tea.ca
Representative: Joseph P Simrany
Alternate: Peter F Goggi Representative: President

Coffee Roasters & Tea Packers' Association


Tourniairestraat 3
Postbus 90445
1006 BK Amsterdam
Netherlands

72
Telephone: 00 20 5113870
Fax: 00 5113810
E -mail: vnkt@koffiethee.nl

Associate members
Zimbabwe Tea Growers' Association Department for Environment Food and
P O Box UA 78 Rural Affairs
Union Avenue Room 247, Nobel House
Harare 17 Smith Square
Zimbabwe London SW1P 3JR

Telephone: 263 4 703469 / 703786 Telephone: 020 7238 3185


Fax: 263 4 705785 Fax: 020 7238 3199
Representative: Sam Magombedze Representative: J O'Rourke

Office du The du Burundi Ministry of Agriculture, Nature and


52, Boulevard de L'uprona Food Quality
B P 2680 Bezuidenhoutseweg 73
Bujumbura P O Box 20401
Burundi 2500 EK The Hague
Representative: Mr Callixte Ntamutumba Netherlands

Tel: 00 257 224228/ 224288 Telephone: 31 70 378 4477


Fax: 00 257 224657 / 226191 Fax: 31 70 378 6126
E-mail: otb@cbinf.com Representative: M J H van Nynatten

OCIR THE Japan Tea Association


Office des Cultures Industrielles du Rwanda Room 602 Tokyo Chagyo Kaikan
BP 1344 8-5 Higashi-Shimbashi 2-chome
Kigali Minato - ku
Rwanda Tokyo
Japan
Telephone: 250 514797 / 514795 / 577082
Fax: 250 573943 / 514796 Telephone: 03 3431 6509
Representative: Gaforomo G Vianney Fax: 03 3431 6711
Representative: Hiroshi Kako

Uganda Tea Association Tea Board of Tanzania


PO Box 4161 PO Box 2663
Mitchell Cotts Building - Annexe Dar es Salaam
Plot 8 Burton Street Tanzania
Kampala
Uganda Telephone: 255 22 2124665 / 2114400
Telephone: 256 41 231003 Fax: 255 22 2114400
Fax: 256 41 231003 / 343121 Representative: S H Mijinga

Representative: I G Munabi

73
Vietnam Tea Association China Tea Marketing Association
92, Vo Thi Sau Str. 45, Fuxingemennei Street
Hai Ba Trung District Beijing
Hanoi 100801
Vietnam China

Representative: Dr Nguyen Kim Phong Tel: 00 86 10 6601 2403


Fax: 00 86 10 6601 8165
Tel: 00 84 4 E-mail: chinatea@vip.163.com
Fax: 00 84 4 625 1801 Web: www.ctma.com.cn
E-mail: vitas@fpt.vn
Web: www.vitas.org.vn

Corporate members
Unilever Pakistan Limited I.N.T. Co. Ltd
Tea Department Yokohama Office
PO Box No 4964 101, 6-4-46
32 West Wharf Road No 4 Kounan, Kounan-ku
Karachi 74000 Yokohama
Pakistan 245-0003
Japan
Telephone: 92 21 2201223 / 2310118 /
2310112-5 Telephone: 00 81 45 846 2313
Fax: 92 21 2310535 Fax: 00 81 45 846 2316
E-mail: nasto@d6.dion.ne.jp
Lipton Australia Ahmed Mohamed Saleh Baeshen & Co
Part of Unilever Australia Ltd
20-22 Cambridge Street P O Box 9822
Epping 2121 Jeddah 21423
NSW Saudi Arabia
Australia
Telephone: 966 2 637 9000
Telephone: 61 (0)2 98696100 Fax: 966 2 637 4656
Fax: 61 (0)2 98696300 E-Mail: info@baeshen.com
Tapal Tea (Private) Ltd China Tea Co Ltd
Plot 40, Sector 15 208 An Ding Men Wai Street
Korangi Industrial Estate Beijing
Karachi 74900 100011
Pakistan China

Telephone: 92 21 5063891 Telephone: 86 10 64204127


Fax: 92 21 5063890 Fax: 84 10 64204101
E-Mail: info@tapaltea.com aftab@tapaltea.com Email: info@teachina.com
mohsin@tapaltea.com Web Site: www.teachina.com
Web Site: www.tapaltea.com

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Nestle SA Cameroon Tea Estates
Av. Nestle 55 PO Box 605
1800 Vevey 1 Limbe
SWITZERLAND South West Province
Cameroon
Telephone: 00 41 21 924 1111
Fax: 00 41 21 924 1885 Telephone: 237 333 3177
Web Site: www.nestle.com Fax: 237 333 3176
Dubai Tea Trading Centre
Jebel Ali Free Zone
P O Box 48800
Dubai
United Arab Emirates

Telephone: 00 971 4 883 8878


Fax: 00 971 4 883 3936
E-mail: sanjay.sethi@dmcc.ae
palitha.perera@dmcc.ae
Web Site: www.dmcc.ae

Bangladesh Tea Research Institute (BTRI):


BTRI is a scientific organization of the Bangladesh Tea Board under The Ministry of Commerce.
It was established in 1957 with view to provide technical support to the Tea Industry of
Bangladesh. The Research Programs of the Institute are mostly adaptive and field oriented in
order to meet the current needs of the Industry. Although BTRI has a research responsibility, its
mandate requires that it provides advisory services to planters also. It accomplishes this through
direct scientists-to-planter contact, often through articipatory research on tea
estates, through training and the distribution of publications. A large portion of BTRI's resources
is devoted to this important linkage.

Major Activities of BTRI


* Evolving of high yielding and quality clones of tea.
* Development of bi-and poly - Clonal seed stocks for seed orchards (Seed baries).
* Conservation of gene resources of tea.
* Raising of vegetative cuttings in the nursery using modern technique and supply of rooted and
fresh cuttings of improved clonal materials to tea estates.
* Evaluation of chemical composition of processed and or unprocessed tea for
quality assessment.
* Standardization of quality and specification of Bangladesh tea in the international market.
* Formulation of fertilizer policy for tea and ancillary crops.
* Rehabilitation of soil, soil-fertilizer relationship analysis and understanding.

75
* Adoption of appropriate methodology in improving the soil condition in existing-, proposed and
rehabilitated tea areas.
* Standardization of cultural practices like- planting, spacing, pruning, plucking, mulching,
planting shade trees and green crops, grafting etc.
* Management and control of various insect, mite and nematodes pests, diseases and weeds of
tea and ancillary crops.
* Pest surveillance and monitoring.
* Investigation into the manufacturing problems and improvement of factory machinery.
* Possibility of multiplication of tea through micro-propagation.
* Introduction of suitable economic plants under crop diversification program.
* Regular advisory services to the tea estates.
* Economic study of tea cultivation.

Such a plan must cover the following thrust areas research:


*Evolving high yielding and quality clones of special feature.
* Raising organic matter status of tea soils.
* Utilization of biotechnology for plant improvement.
* Drainage irrigation & drought management.
* Physiology of tea in local environment and improvement of harvest index.
* Biotechnology to improve soil fertility.
* Application of IPM with different control options of pests.
* IPM components with particular emphasis no bio-control agents.
* Pesticide residue in tea.
* VAM application in tea culture.
* Vermi-culture application in tea.
* Energy source utilization and efficiency.
* Crop diversification.
* Socio-economic study of tea industry.
* Marketing and sales promotion.
* GIS & tea environment study.

TEA DEVELOPMENT

Tea Board is entrusted with the implementing the following developmental schemes during the
10th Five Year Plan for enhancing productivity, quality and marketability of tea in the country:

• Tea Plantation Development Scheme


• Market Promotion Scheme

76
• Quality Upgradation and Product Diversification Scheme
• Research & Development Schemes
• Human Resource Development Scheme

VALUE ADDITION IN TEA PRODUCTS

Kazi & Kazi Tea Estate is a pioneer of tea plantation in Bangladesh and the Darjeeling Tea Belt.
We are the first substantial organic tea estate, and we use only natural resources to control
agricultural pests and weeds. A new brand of high quality tea-organic tea- grown for the first
time in the country by a local company is going to hit the market formally through auction centre
in the port city from Tuesday.

Experts said Bangladesh achieved a great success through successful plantation of tea on the
plain land, which was not traditionally considered as fit for tea cultivation.

Kazi and Kazi Tea Estate (KKTE) is the country''s pioneer company in the field of this kind of tea
production by applying the organic method in cultivation at its garden at Tetulia in Panchagarh
district. Leading brokers said the new `Meena'' brand organic tea would fetch very high price
and be attractive as it is considered as very good quality tea among other brands being
produced in the traditional tea garden of greater Sylhet and Chittagong districts.

Experts, brokers and tea traders at a formal launching ceremony of the new brand here today
highly appreciated the initiative of such tea plantation by applying new method. They, however,
expressed their high optimism about Bangladesh''s ability to produce world standard tea of new
variety and taste.

Bangladesh Tea Research Institute has evolved a clone variety tea in the wake of growing
competition in export market and high domestic demand. Officials of the BTRI said the quality of
the newly evolved ‘BT-16’ species is much improved and some 3,000 to 4,000 kilograms of tea
can be produced in each hectare of land from the cloned trees.

According to a government estimate, some 100 million kg of tea will be required by year 2020 to
meet local demand and fulfil export target. To cope with the rising demand for tea in local and
international markets, the government has already begun cultivation of the improved clone tea
in Chittagong Hill Tracts (CHT), Panchagarh and other district.

Commerce Minister Altaf Hossain Chowdhury formally released the newly innovated BT-16 tea
at a ceremony at the Bangladesh Tea Board auditorium at Srimongal in the year 2005.
Addressing the function the minister said two-third of the amount of tea produced in the country
is needed to cater local demand. “The government is implementing a five-year short-term

77
programme and a 20-year long-term programme to increase the production of tea “in view of the
growing internal and external demand, the minister said.

The minister also distributed saplings of the BT-16 species among a few tea-garden
representatives. Among others, Bangladesh Tea Board Chairman Mosharraf Hossain and
Bangladesh Cha Sangsad Chairman M Wahidul Haque addressed the function.

Ayurvedic practitioners prescribe different types of drinks to help manage what modern-day
scientists call Type II Diabetes or Non-Insulin Dependent Diabetes mellitus (NIDDM)? Vaidyas,
physicians, and nutritionists all agree that the key to managing diabetes begins with diet
modification.

Green tea is widely consumed in Asian countries and is becoming increasingly popular in
Western countries. Epidemiologically, it has been suggested that green tea consumption
prevents type 2 diabetes. The present study was aimed at providing evidence of improvement in
glucose metabolism in diabetic mice and healthy humans upon green tea consumption. Green
tea promoted glucose metabolism in healthy human volunteers at 1.5 g/body in oral glucose
tolerance tests. Green tea also lowered blood glucose levels in diabetic db+/db+ mice and
streptozotocin-diabetic mice 2-6 h after administration at 300 mg/kg without affecting serum
insulin level, whereas no effect was observed in control mice (+m/+m and normal ddY mice).
The serum protein profiles of db+/db+ and +m/+m mice were analyzed for the first time by
SELDI (surface-enhanced laser desorption/ionization)-TOF (time-of-flight)-MS (mass
spectrometry), and then compared to investigate any effects of oral green tea administration on
serum proteins.

Herbs have been used for medicinal purposes, including the treatment of diabetes, for
centuries. Plants containing flavonoids are used to treat diabetes in Indian medicine and the
green tea flavonoid, epigallocatechin gallate (EGCG), is reported to have glucose-lowering
effects in animals.

Tea and Health

Tea has nutritional properties, which means it is rich in vitamins, minerals, anti-oxidants and
many more such healthy elements. Tea is a zero calorie drink too. Tea thus has become
popular with fitness, well being and good health. It has been suggested that an intake of up to
10 cups of tea per day may be a useful dietary habit. 650 ml of tea provides over half of the total
intake of dietary flavonoids; nearly 16% of the daily requirement of calcium; almost 10% of the
daily requirement of zinc; over 10% of the folic acid need; around 9%, 25% and 6% of vitamins
B1, B2 and B6 respectively.
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Tea also provides a dietary source of biologically active compounds that help prevent a wide
variety of diseases. Extensive research has revealed that tea is one of the richest sources of
antioxidants. In fact, fruits and vegetables stand below tea when it comes to the amount of
antioxidants. These antioxidants are found in form of polyphenols. Scientific evidences prove
that antioxidants promote heart health, prevent cancer, help combat & guard against most
diseases like diabetes, BP, tumors, ulcers, inflammations, intestinal problems, tooth decay and
many more common ailments.

We can have a healthier heart with tea. Flavonoids present in tea prevent the oxidation of LDL
cholesterol, thereby reducing the risk of heart diseases. A source of calcium too (from the milk
in it), your cup of tea helps develop strong muscles too. Theaflavins, another component in tea
reduces plaque formation too.

Tea composition varies with climate, season, horticultural practices and variety. Polyphenols are
the most important component in tea, as they constitute approximately 36 percent of the dry
weight of tea. Green and black tea has similar chemical make-up. The primary difference
between the two types lies in the chemical changes that take place during their production. In
case of black tea, polyphenols are oxidized and this is prevented in the manufacture of green
tea, thus making green tea a healthier choice. The most important groups of polyphenols are
the catechins in green tea, theaflavins and thearubigens in black tea. A variety of physiological
effects have been attributed to tea catechins, which are currently best known for their
antioxidant activities.

Black tea is virtually calorie-free (1 calorie per 100 ml) and sodium free, therefore a suitable
beverage for individuals on low calorie or low sodium diet. Tea includes fluoride, traces of
vitamins A, K, C, B carotene and B vitamins.

Tea is a pleasant, popular, socially accepted, economical and safe drink that is enjoyed every
day by hundreds of millions of people across all continents. So, enjoy cup of tea and stay
assured that it is doing well to our system. (Dr. John Weisburger, Director Emeritus American Health
Foundation)

CATECHINS • Reduces tumours


• Lowers blood tri glyceride, blood • Reduces mutations
cholesterol • Helps in the treatment of radiation
• Reduces incidence of cancer sickness
• Reduces oxidation by active oxygen • Prevents dental caries
• Strengthens blood vessel wall and • Kills influenza virus
regulates their permeability • Beneficial in the treatment of dysentery
• Inhibits increase of blood sugar • Prevents halitosis (bad breath)
• Inhibits increase of blood pressure

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CAFFEINE POLYSACCHARIDES
• CNS stimulant, hence increased alertness • Lowers blood sugar
• Gives relief from fatigue, neuralgia and
headaches METHYLXANTHINE
• Acts as diuretic • Acts as diuretic

FLAVONOIDS THEAFLAVIN, THEARUBIGIN


• Strengthens blood vessel and blood • Antagonises the activity of bradykinin
capillary walls • Inhibits arginine and ornithine
• Reduces oxidation by active oxygen decarboxylases
• Acts as anti-inflammatory agent
• Increases the level of catecholamines THEOPHYLLINE
• Stimulates folic acid biosynthesis • Modulates immune response
• Normalises thyroid hyperfunction • Helps in the treatment of asthma
• Salutary effects on cardiac function
FLUORIDE
• Prevents dental caries ESSENTIAL AMINO ACIDS [LEUCINE,
PHENYLALANINE, VALINE, THREONINE]
QUERCETIN • Helps in metabolism
• Acts as Spasmolytic • Maintains nitrogen equilibrium
• Helps in the treatment of acute diarrhoea
THEANINE
VITAMINS • Helps in ammonia and urea metabolism
Vitamin - B COMPLEX (RIBOFLAVIN, • Helps in water clearance by renal tissues
BIOTIN, NIACIN PANTOTHENATE,
INOSITOL) LINOLENIC ACID
• Reduces platelet aggregation
• Aids carbohydrate and fat metabolism
• Helps in inter and intracellular Ca++ Tea pigments
transport • Decreases plasma fibrinogen
• Helps in moisturisation of the skin
Seleno-cysteine
Vitamin- E • Supports normal thyroid function (helps in
the conversion of T4 to physiologically
• Acts as antioxidant and regulates aging. effective T3.)

SALICYLATES GABA
• Acts as an analgesic and antipyretic • Lowers blood pressure

INTERNATIONAL TEA MARKET SITUATION

As part of its regular activities, the Intergovernmental Group on Tea monitors market conditions
and provides an update of potential market prospects for tea over the medium term. This
document examines both the current situation and longer term prospects for production,
consumption and trade of tea, and their likely impact on the world tea market. The tables
mentioned in the document may be found in document CCP:TE 05/CRS 6. Delegates are
requested to update market information pertaining to their country, and discuss possible
strategies for the sustainable development of the world tea economy.

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World tea production continued to reach new highs in 2004, when output grew by 2 percent to
reach an estimated 3.2 million tonnes. The expansion was due mainly to the increases recorded
in Turkey, China, Kenya, Malawi, Sri Lanka and Indonesia. The growth in output from these
countries more than offset declines in other major producing countries including India and
Bangladesh. Production in Turkey was reported to have expanded dramatically in 2004 as
output increased by 32 percent to reach 205 431 tonnes. As there were no reported new areas
planted in the last five years, it is assumed that the expansion was due to higher yields.

Provisional returns from China indicate that output for 2004 approached the 800 000 tonnes
milestone as policy initiatives to promote production and trade of tea began to have an impact
on the sector. Tea production in Sri Lanka increased slightly by 1.3 percent to 309 000 tonnes in
2004, reflecting the recovery from crop losses after devastating floods in low grown tea areas of
the island in 2003. This region usually accounts for more than 50 percent of the country’s tea
output. Slight relief was also evident in high grown areas after drought conditions contributed to
the overall decline in output during 2003. A similar increase was recorded by Indonesia, where a
1.2 percent growth was recorded. Output in that country reached 170 000 tonnes in 2004.

Tea production in Kenya increased by more than 11 percent in 2004 to reach 328 000 tonnes,
as a result of favourable weather in most of the growing regions and the expansion in
processing capacity. The major challenge facing the tea industry in Kenya is the rising labour
cost adding to the rise in cost of production, which was slightly offset by the depreciation of the
Kenyan shilling. Malawi also reported a significant increase of 19 percent in tea production in
2004 with output reaching 50 000 tonnes. Again favourable weather conditions in the whole of
Eastern Africa contributed to this increase, including the output in Tanzania and Uganda where
marginal increases occurred.

Tea production in India declined by 4.3 percent, as output in both the Northern and Southern
production regions contracted. A major factor contributing to the decline was the closure of up to
70 tea gardens in Assam due to the widespread recession in the industry. The downturn was
further exacerbated by unfavourable weather both in the North (floods in the first half of 2004)
and South (drought). Output in 2004 was 820 216 tonnes for the country with 634 485 produced
in the North and 185 730 in the South.

World tea exports increased by 4.4 percent in 2004 to reach 1.47 million tonnes, as shipments
from all major exporting countries increased during the year. Kenya was the largest exporter,
once more surpassing Sri Lanka. The 8.9 percent increase in exports from Kenya brought total
shipments for the year to 292 704 tonnes, in line with expanded output from that country. A

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similar proportional increase of 8.9 percent was recorded by Indonesia bringing the total for that
country to 98 000 tonnes.

Tea exports from China expanded by more than 7 percent to reach 282 212 tonnes, and were
dominated by green tea, which accounted for more than 75 percent of its total exports. Most of
the increase was due to the recovery of market share in the EC and Japan following problems
of non-compliance of MRL requirements in 2003. Exports to Morocco, Uzbekistan, and Ghana
remained strong, while shipments to the Russian Federation and the United States showed no
significant change.

Exports from East Africa also recorded significant increases; 11.9 percent from Malawi, 20
percent from Tanzania and 2.9 percent from Uganda, while exports from Bangladesh and Sri
Lanka remained relatively unchanged in 2004.

Tea exports from Sri Lanka were 290 604 tonnes in 2004 compared to 291 472 tonnes in 2003,
a marginal gain of some 0.3 percent. Attempts to expand demand for Sri Lankan tea in the Far
East have led to the establishment of a tea promotion office in Tokyo to promote black tea
exports to the predominantly green tea markets of China, Japan and the Republic of Korea in
2003.

Tea exports from India recovered slightly by 3 percent in 2004 after a major fall of 13 percent in
2003 to the lowest level in a decade, due mainly to weaker demand from the Russian
Federation, the United Arab Emirates, and the United Kingdom.

World net tea imports continued to increase in 2004, by 1.5 percent, reaching 1.42 million
tonnes. This trend reflected the increases in traditional developed country markets of the EC (an
increase of 2.4 percent), the United States (5.3 percent), and Japan (2 percent), where imports
reached 215 000 tonnes, 99 000 tonnes, and 56 000 tonnes, respectively. Most of the growth in
these markets is reportedly in response to promotional efforts on the health benefits of tea
consumption.

Net imports into Pakistan, the largest developing country importer also continued to increase.
Shipments were larger by 10 percent in 2004, from 109 000 tonnes in 2003 to 120 000 tonnes in
2004, directly influenced by lower tea prices. India could not take advantage of its recent trade
agreement with Pakistan for this precise reason. Tea prices were comparatively high, resulting
in a significant decline in the volume shipped to Pakistan. Imports to Syria increased by 13
percent from 26 000 tonnes in 2003, a net gain of 3500 tonnes. Imports by countries in the Near
East in Africa increased by 2 percent in Morocco, where quantities reached 45 000 tonnes,
while in Egypt imports declined by 11 percent.
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The FAO Composite price, as a world price indicator for tea, increased by 2 percent in 2004,
reflecting the significant gains in the Calcutta and Mombasa auctions. Prices in 2004 opened at
US $1.56 per kg in January and after increasing to US$1.65 per kg in April declined to US$1.56
per kg in June, before surging to US $1.77 per kg in September and closing at US $1.73 per kg
in December. This volatility reflected fluctuations in tea output in major producing countries in
2004 and improvement on the demand side which eased the supply pressure on prices. The
increases were quite significant in local currencies as local currencies of major tea producing
countries have depreciated against the US dollar.

This section of the document examines projections that were generated for the medium term
(10 years from the latest complete set of data available, i.e. 2003) to 2014. It takes into account
the Group’s projections to 2010, which incorporated the revisions provided by members at the
15th Session of the Intergovernmental Group on Tea in Sri Lanka. Members are requested to
review the data and forecasts pertaining to their own situation and provide updates, where
necessary, to allow the Secretariat to revise the projections.

The projections were based on dynamic time series models. Principally, autoregressive
distributed lag models were used to capture the dynamic process of market adjustment in tea
markets. The forecasts are obtained from s-step a-head ADL models, where s is the forecast
horizon. The FAO Tea Composite Price was included as an exogenous factor. Its values, over
the forecast horizon, were obtained from its autoregressive representation. Projections were
based on the assumption of normal weather conditions, and a continuation of the past trends in
yields, planted areas, population and income growth. Adjustments were made to reflect current
policies and future market prospects. The forecasting models captured cycles and trends in tea
markets to a satisfactory level.

World black tea production is projected to grow by 1.7 percent annually from 2003 to reach 2.7
million tonnes in 2014, mainly due to improvements in yields (Table 5). Among countries in
Africa, a significant growth in output is expected as tea bushes reach optimum producing age
and smallholder skills are maximized through intensive capacity building. Tea harvested in the
largest producing country, Kenya is expected to grow by 2.4 annually to reach 379 000 tonnes
in 2014, signifying a slowing in growth rates of the last decade. Other producing countries of
significance include Malawi where output is projected to increas by 7 000 tonnes to reach 49
000 tonnes by 2014, while in Uganda and Tanzania output should reach 38 000 tonnes and 33
000 tonnes, respectively by 2014.

In the Far East, output in India, is expected to grow by 1.6 percent annually to reach 1.01 million
tonnes in 2014. Among the other major black tea producing countries in the region, a slightly

83
higher growth rate of 1.9 percent is projected for Sri Lanka to reach 370 000 tonnes, while
output in Indonesia will reach 150 000 tonnes, an annual growth rate of 1.5 percent. Black tea
production in China is expected to decline, as the balance of production shifts to other teas with
stronger market prospects.

World green tea production is expected to grow at a faster rate than black tea at 2.3 percent per
annum, but volumes are much smaller at a projected total of 975 000 tonnes by 2014. China
would continue to account for more than 75 percent of world green tea output with an output of
740 100 tonnes, replacing some of its black tea production. However, the annual growth rate
would slow from 3.8 percent over the last decade (1993-2003) to 2.2 percent over the next
(2003-2014). A similar slow-down is expected in Viet Nam as the expansion in area has
somewhat abated in recent years, but volumes are considerably smaller. Production in Viet
Nam is projected to grow at 2.6 percent from 30 000 tonnes in 2003 to 39 600 tonnes in 2014,
while production in Japan will slightly increase by 0.5 percent annually to reach 92 000 tonnes in
2014. For Indonesia, growth rates are expected to pick up again in the next decade after a slow-
down since the Far East economic crisis in 1997. Output in Indonesia is expected to expand to
49 100 tonnes in 2014, from 41 000 in 2003. Most of the growth in green tea output would be
due to an expansion in area planted and harvested.

The growth rate in world black tea consumption is expected to be reduced from 2.2 percent over
the last decade (1993-2003) to 1.2 percent over the next (2003 to 2014) to reach 2.67 million
tonnes by 2014. The main reason is the slow-down in consumption in producing countries, as
the production growth rate outpaces the growth in demand for exports. Global tea consumption
is divided into net imports for non-tea producing countries, and domestic consumption in
producing countries, measured by production less exports.

World net imports of black tea, a proxy for consumption in importing countries, are projected to
increase annually by 1.2 percent to reach 1.34 million tonnes in 2014 from a base of 1.17 million
tonnes in 2003. Imports by the CIS (predominantly the Russian Federation) and Pakistan are
expected to increase by 3.0 percent and 3.4 percent annually, respectively, in line with GDP
growth expectations. Net imports by these countries are expected to reach 342 000 tonnes and
120 300 tonnes, respectively, by 2014. In the EC (15) a slight decline in imports is expected due
mainly to the 1.6 percent annual contraction expected in the United Kingdom. Notable increases
are expected in Germany, the Netherlands and France, but the expansion in these countries will
be insufficient to offset the decline in the United Kingdom.

In 2014, the quantity of black tea consumed in producing countries is expected to grow by 1.3
percent per year to reach 1.33 million tonnes. Producing countries consumed 52 percent of their

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black tea production in 1993-2003, and are projected to consume only 49 percent in 2014,
adding to the demand and supply imbalance. The largest increase in domestic consumption
would occur in the Far East, as tea-producing countries in Africa are expected to continue to
export most of their output. Domestic consumption of black tea in India is expected to increase
by 1.5 percent annually to reach 805 700 tonnes in 2014 or almost 80 percent of the tea
produced in that country. Consumption in Indonesia is expected to increase at an annual rate of
1.6 percent to reach 57 000 tonnes by 2014, while in Bangladesh and Sri Lanka, tea
consumption would grow at 3.0 percent and 2.5 percent to reach 48 400 tonnes and 17 500
tonnes, respectively.

World black tea exports are projected to reach 1.3 million tonnes in 2014, reflecting an average
annual increase of 1.4 percent per year from 1.1 million tonnes in 2003.

About half of the increase would originate in Africa, where production is likely to continue to
grow while domestic consumption remains small. The region's total black tea exports are
projected to amount to 518 000 tonnes by 2014. Exports from Kenya would increase by 2.7
percent annually to reach 358 000 tonnes in 2014, giving Kenya a 27 percent share of the
global black tea export market. Privatization of the Kenya Tea Development Authority (KTDA)
and the abolition of grower permits and export licences are expected to improve Kenya’s export
performance. Substantial growth in black tea exports is also projected for some other East
African countries, such as Malawi (1.2 percent annually) and Uganda (2.2 percent annually).

The Far East would account for the other half of the expansion in black tea exports. Sri Lanka,
the second largest exporting country in the world, is expected to increase exports by 1.2 percent
annually to reach 330 000 tonnes by 2014, continuing to account for 25 percent of the global
total. Exports from India are projected to increase annually by 2 percent to reach 211 000
tonnes in 2014. More modest growth rates are expected for Indonesia and Bangladesh where
exports contracted in the previous decade and annual increases of 0.4 percent and 0.2 percent,
respectively should now be attained.

World green tea exports are projected to grow by 2.8 percent annually to reach 275 000 tonnes
by 2014. China is expected to continue to dominate this trade with a volume of 242 000 tonnes,
followed by Viet Nam with 28 000 tonnes, and Indonesia with 5 800 tonnes.

Recent developments in the world tea market suggest that the major players have adapted
pretty well to the uncertainty in prices in the short term, particularly for black tea. Green tea does
not have the same difficulty as it currently enjoys a premium over black tea. A recent study
conducted by the Secretariat on value chains (CCP: TE 05/4) indicated that, of the 27

85
agricultural commodities studied, tea showed the second lowest variability in prices (2 percent
decline in tea prices compared 39 percent for cocoa and 38 percent for coffee).

The major issues plaguing black tea include the erosion of market shares in the total beverages
market, coupled with stagnant consumption in some markets, leading to reduced prices. The
fundamental oversupply in the world market is likely to persist and prices are likely to remain
depressed. New strategies particularly aimed at enhancing consumption and increasing value-
addition as well as further reduction in production and marketing costs are required.

In the medium-term, the projections indicate an increasing imbalance between supply and
demand of 98 000 tonnes. Part of the reason is due to the actual projections on production
given by some members which appear to be higher than those generated by the model.
However, if the projected imbalance is realized then further weakening in prices may be
expected. In terms of profitability, a major concern is the rising cost of production, which can
only be minimally reduced by increasing mechanization as the the scope is limited if quality is to
be maintained. Improving yields through capacity building of growers, optimising inputs,
streamlining marketing channels and improving infrastructure could also reduce production cost,
but may also lead to over-supply. The preferred solution must lie in stimulating demand.

Appropriate marketing strategies, including market access, could lead to improved returns to the
industry. Variation in demand among countries suggests that marketing activities need to be
tailored to individual markets. Value addition possibilities and quality standards need to be
identified for each market and strategies devised to reap the appropriate premium. The results
from extensive research demonstrating the health benefits of tea should also be more
aggressively used in promoting tea consumption in an increasingly crowded beverage market.
Finally, food standards, particulary MRLs, need to be complied with. Global harmonization of
MRLs in tea could reduce costs of compliance on tea exporters. This is a major agenda item at
this session, and the Group might wish to adopt recommendations on the way forward.

The government has taken initiatives to bring more areas under tea cultivation to increase the
production and meet the growing demand in the local and international markets, reports
BDNews.

"Based on a survey, we have sorted out 46,000 hectares of new land in Rangamati, Bandarban
and Khagrachhari districts for tea cultivation," Chairman of the Bangladesh Tea Board (BTB)
Mosharaf Hossain told BDNEWS.

As part of the expansionary plan, six small holding gardens have already started operations in
North Bengal, Hossain said.
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Bangladesh has only 162 registered largest tea plantations.

Officials of the Bangladesh Tea Association (BTA) said they are facing stiff competition from
countries like India, Sri Lanka and Indonesia in tea export because of their integrated efforts to
boost tea industry. "We have also carried out a survey in Garo areas in Mymensingh," the BTB
chairman said.

Although the area is fit for tea plantation, we will not be able to do it because the area belongs
to the Forest Ministry, he added.

Operations of tea gardens in the new areas, especially in hill districts, are likely to start within
the next four to five years, he said, adding the government has to develop infrastructure first.

Another official of the Board said the government already started compensating small farmers
who lost their lands for tea cultivation in the northern part of Bangladesh, particularly in
Panchagarh.

To acquire tea cultivable land in three hill districts, he said, the land is owned both by the
government and private sector and it will take time.

A tea exporter told BDNEWS that Bangladesh has the prospect to grabbing the market of the
Middle East, where exports from Dhaka declined significantly in the past 10 years.

Now, Bangladesh exports around 15 million kilograms of tea annually. Of which, 80 per cent is
exported to Pakistan alone, BTB officials said.

Recently, a Bangladesh delegation comprising representatives from the Labour Ministry,


workers' union and BTA visited several tea plantations in the Dooars, in West Bengal in India to
gather experience about the plantations in India. ABM Abdus Sattar, Joint Secretary, Ministry of
Labour and Employment, led the team.

Today, the main tea-growing areas lie to the east of the Ganga-Jumma flood plain in the hill
areas bordering India's Cachar tea-growing district. Most of Bangladesh tea grows at only 80-
300 ft. above sea level northeast of Sylhet.

PROBLEMS RELATING TO TEA EXPORT AND TEA MARKET EXPANSION

Bangladesh tea export is facing stiff competition in the global market and it stay in the
competition would be tougher in he days ahead if not quantity is increased and competitive
edge raised considerably, industry sources said. Bangladesh Tea Board (BTB) and industry

87
sources said offensive new market search is essential raising the competitive edge of
Bangladesh tea. The sources said improving quality and low production cost have become
imperative to increase the competitive edge of tea to stay in the global race.

Higher production in major tea producing countries for successive years, availability of better
quality tea in low price than that of Bangladesh have thrown a challenge for Bangladesh tea in
the global market. Low quality, higher price, rise in domestic tea consumption are shrinking the
Bangladesh tea market abroad, the sources said. Sources said Pakistan remained the largest
buyer of Bangladesh tea during last couple of years. Pakistan imports nearly 85 per cent of
Bangladeshi tea after Islamabad granted duty-free access to Bangladesh tea to their market.

“Because of rise in production of quality tea by other exporting countries and low quality and
decreasing quantity of Bangladeshi tea is making the future of tea export grim,” National
Brokers Ltd. - a leading tea auctioneer in the country commented in its annual report 2003-
2004. The report also said that Pakistan, which has been a major outlet of Bangladesh tea, has
lately been importing an increased quantity of tea from India, Vietnam, China and Indonesia at a
very competitive rates in addition to their bulk of import from Kenya and other African countries.

“Therefore Bangladesh tea is likely to face a stiffer competition from those countries in the
Pakistan market” the report predicted. Exporters as well as BTB officials viewed that local tea
industry, particularly the planters and marketing companies, might sustain somehow with the
blessings of ever expanding domestic markets, but the presence of Bangladesh tea in
international market would become scarce. They feared that Bangladesh’s traditional export
item -tea would be forced to pull out from the global market due to dependence on single outlet,
lack of quality and price competitiveness and poor production. Official sources said Bangladesh
produced 55 million kgs tea in the fiscal 2001-2002, 54.2 million kgs in the fiscal 2002-2003, and
44.2 million kgs up to April of the just ended fiscal.The country had exported 13.8 million kgs in
the fiscal 2001-2002, 12.1 million kgs in the fiscal 2002-2003 and 11.6 million kgs up to April in
just ended fiscal.

On the other hand, internal consumption was 40.4 million kgs in the fiscal 2001-2002 and 39.8
million kgs in the fiscal 2002- 2003, which is almost double in a decade. Domestic consumption
in fiscal 1996-1997 and 1997-1998 were 27.4 million kgs and 24.4 million kgs respectively.
Sources said increased domestic consumption has emerged as a threat to tea export as lesser
quantity of exportable tea are left at the export basket after meeting the local demand although
increased internal market came up as cushion for the growers as well as blenders.

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“Growers least bothered to improve quality of tea because they can sale all their produce
whatever may be the quality in the domestic market” a BTB official told BSS on condition of
anonymity. The experts quoting statistics forecast that the way annual domestic demand has
been rising at the rate 3.5 per cent against the 1 per cent increase of production, Bangladesh
would be turned into a tea importing country by the year 2015 to meet the domestic demand if
the trend continued.

Deputy Director ( Trade ) of BTB Shahe Alam Mia said there is no alternative but to improve
quality and quantity of Bangladesh tea to compete in the international market with countries like
India, Kenya, Vietnam, Mauritius , Malawi, Uganda, China and Indonesia, who are offering
better quality tea with competitive prices. He categorically denied a report appeared recently in
a section of the press that tea export faced a disaster in the last fiscal and said export was a bit
higher both in volume and price in the fiscal that ended on June 30 compared to the previous
years. He expressed the confidence that per hectare production of tea could easily be raised up
to 2500 kilogram from the current average of 1160 kilogram and Bangladesh’s annual tea
production could easily be raised up to 70 million kgs within next five years through new
plantation, bringing more land under tea cultivation, improving management of locally owned
gardens.

BTB Chairman Brig. General S A H M Tauhid said production cost could be reduced only
through increasing production, maximising use of fallow and unused lands inside existing tea
gardens and bringing prospective huge cultivable lands including those in Chittagong Hill Tracts
under tea plantation. He said improvement of quality of tea is also possible if the garden owners
go in line with the suggestions of Bangladesh Tea Research Institute during two annual testing
sessions. “Why not local planters are able to produce quality tea if sterling companies (British
origin companies) can do it in Bangladesh by cultivating tea at the same soil and weather” the
TBT Chairman questioned.

General Tauhid told the agency that relentless efforts are going on from government side to
keep country’s traditional tea industry and a very old export item in the world market. He said
keeping the challenges in the mind; BTB has submitted a 20-year “strategic plan” of Taka 775
crore to the Commerce Ministry for producing 110 million kilograms of tea a year to revitalize the
tea industry. “The project is under active consideration and the higher authority would meet
soon to review it” he said.

Although the tea export of Bangladesh decreased by more than one percent during the last
fiscal year over the 2003-2004 fiscal year, the world tea production last year reached a record

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3.2 million tons, according to a report released by the United Nations Food and Agriculture
Organisation on Thursday.

The report said the world tea export increased by 50,000 tons which is more than the production
in 2003, but production of the major exporters such as India and Bangladesh has decreased.
The FAO report was prepared for the Intergovernmental Group on Tea meeting in Bali (20-22
July 2005) to review the current world tea market and its medium-term outlook. Increase in
export was due mainly to record production in Turkey, China, Kenya, Malawi, Srilanka and
Bangladesh. Azharul Islam, Director of Bangladesh Tea Board, yesterday told the news agency
that reduction in tea export was due to a rise in domestic consumption. He said annual
production of tea failed to cope with higher domestic consumption. Presently, the consumption
is rising by 3.5 percent annually against 1 to 1.5 percent rise in production, he said. He,
however, hoped that tea production would mark a record growth this year because of favourable
weather.

Table. Tea smallholdings in South Asia

Country Units Processing units Production Share in production


(No.) (No.) (million kg) (%)

Bangladesh Nil Nil Nil Nil


India - - - -
North n.a. 14 2 0.4
South 8 000 132 38 21
Sri Lanka 230 000 260 130 54
South Asia 406 170 16
Source: Tea Boards of India and Sri Lanka.

It is becoming increasingly evident that tea growing lends itself ideally to smallholder cultivation.
Unlike seasonal or fruit crops, tea generates year-round income to the farmer. The higher land
and labour productivity ensure a production cost that is lower than in the estate sector. In social
terms, the development of smallholdings offers more employment opportunities to rural women,
thereby enhancing the living conditions of families. Given an efficient agricultural extension
system and proper processing facilities in close proximity, increased small-grower participation
in the tea industry could serve as an effective strategy for raising incomes and providing an
impetus to the farming community in developing countries.

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Market break-down

There are two major types of tea, black and green. Black tea accounts for around 75% of global
production and over 90% of the market in western countries. Black tea results from leaves that
are fully oxidised, while green tea leaves are steamed, rolled and dried without any oxidation.
Most green tea is grown in China and is gaining popularity in the West, partly for health reasons.

Output of black tea is projected to grow by 1.9% annually to reach 2.7 million tonnes in 2010,
mainly due to improvements in yields rather than an expansion in area. World production of
green tea is expected to grow at a faster rate of 2.6% per annum to reach a projected total of
900,000 tonnes by 2010.

Global production and consumption

Tea is grown in 36 tropical and semi-tropical countries, 19 of them ACP countries. The six
largest producing countries - India, China, Sri Lanka, Kenya, Indonesia and Turkey (in that
order) - account for 80% of world output. Less than half of production is exported, as India and
China, in particular, are major consumers as well as producers.

Global tea production in 2003 reached 3.15 million tonnes, 75,000 tonnes more than in 2002,
almost 2.4% higher, largely as a result of favourable weather conditions. All major producing
countries recorded increased output, except Sri Lanka and Indonesia. India accounted for
27.4% of world output, followed by China, 24.6%, Sri Lanka, 9.75%, and Kenya 9.4%. The
FAO’s provisional figure for output in 2004 is 3.197 million tonnes, which would be 1.5% higher
than that in 2003.

Global production has grown by around 2% a year since 1993-95, but consumption in Western
countries has grown by only around 1%. In a number of developing countries, however,
consumption has kept pace with, or exceeded production.

India is the largest consumer of tea, accounting for over 20% of global consumption, followed by
China, accounting for around 13%. The UK, the Russian Federation, the CIS countries,
Pakistan and Japan are also major consumers.
Main world producers and leading ACP 2004 (provisional) (tonnes)
producers
India 845,000
China 821,000

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Sri Lanka 303,000
Kenya 290,000
Indonesia 158,843
Malawi 45,000
Uganda 35,000
Tanzania 25,500
Zimbabwe 22,000
Rwanda 15,484
Source: FAO (Fiid & Agricultural Organization we site www.fao.org

How the tea market works

Tea is unusual among major agricultural commodities in that it is sold through auctions or in
private deals, increasingly on-line. Unlike coffee or cocoa, there is no futures market for tea.
Methods of sale have evolved over centuries according to conditions prevalent in the market
place at any one time. Auctions began in 1679 in London and in the 19th century in Colombo
and Calcutta.

There are two auction centres in ACP countries, both in Africa. The major centre in Mombasa,
Kenya, offers between 60,000 and 90,000 packages of tea every week, with teas mainly from
Kenya, but also from Uganda, Rwanda, Tanzania and Zaire. The other auction centre, in Limbe,
Malawi, sells teas from Malawi and occasionally from Mozambique, Zimbabwe and Zambia.
Due to the seasonal nature of Malawi's tea production, the auction operates weekly for the six
months of the season - between December and May - and fortnightly thereafter.

A few firms dominate sales in each auction centre: J. Thomas & Co. Pvt. Ltd., the largest tea
broker in the world, handles over 155 million kg of tea a year; Carritt Moran and Co. Ltd. is the
second largest.

On-line tea auctions have recently been set up alongside traditional auctions. These speed up
access to information and facilitate participation. Bids can be submitted at any time and the sale
process is not geographically confined. Transaction cycle times and the stages in handling are
reduced. Also, teas need not be transported to warehouses as inspections can be done using
samples couriered to buyers from the plantations.

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Although the auction system would seem to approximate a 'fair market' in which prices are
determined solely by the interplay of supply and demand, the system does not always work well
for small-scale producers. Auction prices vary considerably with both the quality and quantity of
tea on offer, and the demand for tea at any given time.

Price transparency, in theory one of the main advantages of an auction system, is often limited
in practice. Although buyers have a fair idea of the quantity and quality of tea to be offered at
any given auction, sellers have little idea of how much will be demanded. They also know little
about buyers’ preferences and intentions. Thus, they have no way of accurately predicting the
return on their crop.

The system is also open to abuse. The concentration of buyers in most auction centres is high,
and new buyers can be discriminated against for a number of reasons. First, brokers generally
do not accept bids from buyers they do not know, as they feel it increases their risk; second, the
new buyers are disadvantaged by the fact that the tea has to go to the processing and
packaging plants, most of which are owned by the established companies competing with them
in the same auction.

There is evidence of collusion among brokers to influence prices. UNCTAD has pointed to the
danger arising from links between selling brokers and firms operating tea estates and the small
number of buying brokers in 1982. In the 1970s, a commission of inquiry into the tea auction
system set up by the Sri Lankan government concluded that it appears that there is 'a high
degree of collusion that prevails in buying and ….wide scope for collusion between brokers and
buyers'. Such collusion, if it occurred, would tend to reduce the price at which producers could
sell tea at the auctions, and would also affect prices of direct sales.

More recently, investigations by the Kenyan Government found in March 2005, that tea buyers
at the Mombasa auction are involved in collusive bidding, with prices being controlled by the
alleged 'cartel members'. The big buyers 'manipulate the bidding process. Instead of bidding
against each other and the highest bidder winning the lot, the alleged cartel members control
prices and therefore split or share invoices or lots,' says its report. If prices are being restrained
in this way, then clearly tea growers are being harmed.

The Kenya National Chamber of Commerce and Industry has called for the elimination of tea
auctions.

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International producers and traders

As we have seen a small number of companies dominate the tea industry. They have a
presence at almost all stages of the journey of tea from tea bush to tea bag or packet. The
companies buy their tea at an early stage of production, and usually carry out the high-value-
added blending and packaging (which account for 80% of the retail price), at facilities in the EU
and other Western countries.

Blending means that many tea qualities have become exchangeable and are bought wherever
they are cheapest. The major companies are not reliant on any one particular source and can
easily freeze out a particular producing country if it does not co-operate with the needs of the
company.

The UK/Dutch company Unilever is the world's largest supplier of black tea. With tea estates in
India and eastern Africa it has an estimated 15% share of global black tea sales. Its subsidiary
Brooke Bond Kenya is the country’s largest plantation company with an 11% share of output. In
July 2004 the company changed its name to Unilever Kenya Tea. Unilever’s major brands
(including Lipton, PG Tips and Red Label) have an annual turnover in excess of €2.35bn and
are available in more than 100 countries. Unilever's Lipton Yellow Label is the world's most
popular tea brand.

James Finlay Ltd produces around 55 million kg of tea each year on its plantations in Kenya,
Uganda, Bangladesh and Sri Lanka.

Tata Tata Ltd (India) has 18 subsidiaries worldwide and a significant presence in 35 countries. It
owns more than 70 estates in India and Sri Lanka, produces over 60 million kg of black tea and
in 2003 acquired Tetley, the second-largest tea bag brand worldwide.

Major trends in the market:

There is no single world price for tea, but rather differing prices at different auctions. The price
trend is downward. World Bank figures suggest that between 1970 and 2000, tea prices fell by
44% in real terms. After rising slightly between 2000 and 2004, the price fell back in early 2005
to below the average level of 2001.

Average tea prices, Mombasa auction (US cents/kg)


2001 151.7
2002 148.2

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2003 154.4
2004 155.4
2005 (Jan/Feb avge) 149.9
Source: World Bank

The prices in the table compare with a 1974 tea price of around US cents 140/kg. After taking
inflation into account, the real price of tea has dropped substantially. In real terms, producers
now receive less than half what they received 30 years ago. While technological innovation and
the development of new teas has led to some expansion of the market, they have increased
world output of tea and reduced prices without affecting global demand significantly. In the
absence of supply-management strategies, production has outstripped demand.

Tea prices have nonetheless fluctuated less dramatically than coffee prices, giving small-scale
tea growers a little more certainty than coffee farmers. But year on year their situation has
worsened, making production of the crop increasingly marginal for many.

Tea is facing increasing competition from soft drinks and other beverages. Although the British
are traditionally amongst the world’s largest tea drinkers, consumption has declined recently.

According to the FAO’s Intergovernmental Group of Tea, world imports of black tea are
projected to be in balance with exports in 2010. It expects world tea production to reach 3
million tonnes by 2010, slightly more than the record reached in 2001, while international trade
would reach 1.4 million tonnes, valued at US$2.9 billion.

Oxfam projects a surplus of export availabilities of about 24,000 tonnes over import
requirements for 2005, a surplus of 2%.

The production structure of the ACP tea sector

The 19 ACP tea producers are Burundi, Cameroon, DR Congo, Ethiopia. Kenya, Lesotho, Mali,
Malawi, Mauritius, Mozambique, Nigeria, Papua New Guinea, Rwanda, Seychelles, South
Africa, Swaziland, Tanzania, Uganda and Zimbabwe. All but Lesotho, Mali, Nigeria and
Seychelles export tea.

Kenya accounts for over half of the tea output in ACP countries. Malawi, Uganda and Tanzania
are the next largest producers, (in that order) with Malawi’s production about 15% of Kenya’s.

Globally, most tea is grown on plantations. In the ACP countries, small-scale growers are also
prominent; in Kenya, they account for about 60% of the country’s tea production. Smallholders
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often grow tea bushes alongside staple crops for their own consumption, with the tea providing
cash income.

Outsourcing is practiced in some countries - in Zimbabwe and Malawi, for example - with
growers using their own plots to grow tea on contract for plantations. Only the smallest
producers farm their land entirely with family labour, and many smallholders employ workers,
often on a casual basis.

On plantations, the use of child labour seems common in many of the poorer tea-producing
regions, due to the economic conditions of the household and lack of schools. A recent survey
by the Malawi Congress of Trade Unions found, for example, that child labour is a very serious
problem in many tea (and also tobacco) plantations.

After harvesting, the leaves from the tea bushes can be processed in two ways – CTC (crush,
tear and curl) or orthodox. CTC is used primarily for tea bags and lower-quality leaves. Up to
97% of Kenya's tea is CTC, (compared with Sri Lanka, where about 90% is orthodox).

CTC processing is done by machines which rapidly compress withered tea leaves, forcing out
most of their sap; they tear the leaves and curl them tightly into balls that look something like
instant coffee crystals; the leaves are then 'fired,' or dehydrated. The process does not allow for
the careful treatment that high-quality leaves merit, but CTC has an important role as it allows
for the rapid processing of a high volume of leaves which would otherwise go to waste. It is also
good for producing a strong, robust flavour from leaves of middling quality. For many varieties of
leaf CTC is the preferred processing method.

The orthodox method is more complex, and is usually done mostly by hand. The process differs
for black and green teas. The basic steps in the production of black tea are withering, rolling,
oxidation, and firing. First, the leaves are spread out in the open (preferably in the shade) until
they wither and become limp. This is so that they can be rolled without breaking. Rolling, the
next step is now more often done by machine than by hand. Rolling helps mix together a variety
of chemicals found naturally within the leaves, enhancing oxidation. After rolling, the clumped
leaves are broken up and set to oxidise.

Oxidation, which starts during rolling, is allowed to proceed for an amount of time that depends
on the variety of leaf. Longer oxidation usually produces a less flavourful but more pungent tea.
Finally the leaves are heated, or 'fired,' to end the oxidation process and dehydrate them so that
they can be stored.

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Low prices for tea tend to be passed on to the poorest segments of a country in the form of low
wages on plantations. Given that it is easier to cut costs (by reducing labour costs) than raise
prices (it is impossible for a producer country to attempt this unilaterally), producing countries
have to remain competitive by lowering wages – which partially accounts for the rut in which
plantation wages are caught.

Labour costs account for over half of the cost of production, and approximately 75% of that
arises in plucking. There is downward pressure on farmers’ incomes and labourers' wages and
working conditions, even though the proportion of wages in the consumer price of tea is low.

Table: tea production and exports of ACP countries

Production (tonnes) 2004 Exports (tonnes) 2003


(provisional)
Burundi 6,600 573
Cameroon 4,000 1
DR Congo 1,389 146
Ethiopia 3,900 2,193
Kenya 290,000 293,751
Madagascar 716 -
Malawi 45,000 37,945
Mali 50 -
Mauritius 1,436 52
Mozambique 10,500 937
Nigeria n/a 178
Papua New Guinea 6,500 6,600
Rwanda 15,484 15,170
Seychelles 225 -
Swaziland n/a 96
Tanzania 25,500 20,887
Uganda 35,000 8,071
Zambia 750 -
Zimbabwe 22,000 13,355
Source: FAO NB: F O Licht lists Kenya ’s exports at
268,801 tonnes

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The relative role of ACP tea in world trade
ACP countries account for around 30% of global tea exports. According to FAO figures, Kenya
is the world’s largest exporter, (293,751 tonnes) followed by Sri Lanka (291,000 tonnes); China
(263,000 tonnes), India (171,000 tonnes) and Indonesia (90,000 tonnes). According to F O Licht
data, Kenya is the second largest exporter.

The competitiveness of ACP tea

Yields of tea and the cost of producing it vary enormously from smallholder to estate, estate to
estate, country to country. In Kenya the estate sector is the most efficient with yields of about
2,670 kg/ha compared to 1,167 kg/ha in Sri Lanka. This is reversed in the smallholder sector; in
Kenya, yields from smallholders average only 1,651 kg/ha as against 2,217 kg/ha in Sri Lanka.
The low level among Kenya smallholders is attributed to low levels of fertiliser usage, poor
husbandry practices and inferior management. Paradoxically, tea smallholders in Kenya
generally earn more than tea workers, many of whom would prefer to be smallholders.

The Kenya Tea Development Authority pays a minimum of Ksh 7.50 (US cents 9.5) per kg to
smallholders and outgrowers. Growers in Uganda receive US cents 10.4-15, those in Rwanda
US cents 9.5, and those in Malawi US cents 7.5.

The economic significance of tea to ACP countries

Tea output is increasing in the ACP group as in other tea-producing areas. Kenya’s production
increased from 203,000 tonnes in 1993-5 to 290,000 tonnes in 2004, while its exports increased
even faster, from 208,154 tonnes in 2000 to 293,751 tonnes in 2003. Tea accounts for around
20% of Burundi’s total exports, 18% of Kenya’s, 12% of Rwanda’s and 7% of Malawi’s.

Uganda and South Africa are vigorously developing their tea sectors, the latter partly through
red tea (rooibos), worldwide export sales of which increased by 400% between 1998 and 2003.
Studies carried out in South Africa have shown that rooibos is rich in antioxidants and may help
protect against damage that can lead to types of cancer and heart problems.

There is a danger that expansion could have a negative effect on world tea prices, especially
given the near stagnant demand for tea in many Western countries.

The EU regime

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The EU has no restrictions on the import of tea, nor does it have quality standards. The EC
describes tea as 'a totally liberalised market'. The most favoured nation (MFN) tariff is zero, and
there is no tariff escalation if tea is processed, unlike the case for coffee and cocoa. However,
on small packages only, a 5% ad valorem tax applies on imports into the EU of green tea (not
fermented) in immediate packings of a content not exceeding 3 kg, and on black tea (fermented)
and partly fermented tea, in immediate packings of a content not exceeding 3 kg,

According to the EC, the main issue concerning the tea sector is the way its producers are not
protected from 'copycats'. Around 10,000 tonnes of 'Darjeeling' tea, for example, is produced
from an estate in Darjeeling, India, but 30,000 tonnes is sold under this designation around the
world.

The EC would like to see an international register of food-and-drink products that are made from
a special recipe, or are from a specific region, that are not allowed to be copied. The March
2005 WTO ruling on Geographical Designations of Origin should help ACP countries that want
to develop regionally specific teas. The EU believes that the ruling upholds its system of
granting protection to products with specific geographic origin (GIs).

The need for investment to improve quality and add value

Investment is needed to raise the general quality of ACP teas which tend to be low. This is
reflected in the comparative prices at the Mombasa auction on the one hand and the Indian and
Sri Lankan auctions on the other. For instance in January/February 2005, tea fetched an
average of US cents 154.4/kg in Mombasa compared with US cents 194.2/kg at the Colombo
auction.

More investment is needed to produce specialty teas. Teas in this category from Kenya and
Rwanda and other ACP tea-producing countries are in demand and have attracted good prices.
Specialty teas from India have earned a reputation for high quality and fetch very good prices. A
batch of genuine Darjeeling tea, for example, fetched a record, if exceptional price, in 2003 of
£223/kg., compared with less than £1/kg for ordinary teas.

Tea-producing countries would profit from expanding into upstream activities, adding value in
their own country, and generating additional employment, income and revenue. Efforts by
producers to enter activities such as blending have been hampered by poor market information
and inadequate marketing strategies, aggravated by a lack of funding. The Kenya Tea
Development Agency (KTDA), which processes and markets tea on behalf of its 370,000
smallholder owners, wants to reverse this. In March 2003 it announced plans to blend KTDA tea
with cheaper African teas and sell them in branded packs to foreign markets. In early 2004 the
99
KTDA announced that three new tea brands are being produced in Kenya for export: green,
orthodox and flavoured tea. The development of the products was inspired by a need 'to meet
new customer demands'.

New strategies aimed at adding value and reducing production and marketing costs are also
needed, especially to meet changing tastes.

The importance of the EU market globally

Global tea imports in 2003 totalled 1,319,574 tonnes, of which the EU imported 291,469 tonnes,
22.1% of the total. The UK imported 156,636 tonnes, 53.74% of EU imports, and about 12% of
global exports. Germany was the EU’s second largest importer. The EU share of global imports
is set to rise with the entry of Poland, a major tea-consuming country, which imported 30,594
tonnes in 2003.

The importance of the EU market to the ACP

The overall slow growth of tea consumption in Europe means that the EU tea market is
declining in importance for ACP countries producing standard teas, (although the accession of
Poland may modify this).

The UK has lost its historical position as the largest importer of Kenyan tea; Pakistan now buys
25% of it, followed by Egypt, the UK, Afghanistan and Sudan.

However, the EU market for fair-trade and specialty tea is likely to grow in importance for ACP
tea producers.

Profile of the market for tea in Europe

Germany is the fastest growing EU market increasing its imports from 40,583 tonnes in 2002 to
45,787 tonnes in 2002 and buying more of the higher-quality teas. The UK is buying less -
imports were down from 164,070 tonnes in 2002 to 156,636 tonnes in 2003 - with the market for
standard teas in decline.

EU countries have different requirements: continental Europe buys leafy orthodox teas, while
the UK prefers the CTC teas which are normally used in tea bags. Germany buys first-flush
Darjeeling at more than US$30/kg, for example, while the UK would only reluctantly pay
US$2.50/kg for a top-quality Kenyan tea.

100
In the 1920s, the UK was the tea supremo, absorbing 60% of world tea exports. Now it seems
that a visitor to Europe is more likely to find a good cup of tea in Germany rather than in Britain.

The ACP-EU trade relationship in the tea sector

The EU’s historical relationship with ACP countries lays the basis for cooperation, given that EU
countries do not grow tea. The entry of Turkey, the world’s sixth largest tea producer, into the
EU could change this and cause considerable, but as yet unknown, repercussions for ACP
countries.

The EU gives financial support to tea projects in ACP countries. The Smallholder Tea
Development Programme in Uganda, for example, was assisted with €20 million from the
European Development Fund. The objective of the project was to develop Uganda’s smallholder
tea subsector and make it profitable, and to increase farmers’ real income, employment
opportunities and foreign-exchange earnings.

ACP counties could gain, believes the EU, if the WTO were to extend the extra protection for
GIs, currently limited to wines and spirits, to other products including commodities - Ceylon tea,
for example. 'There is ample evidence that geographical indications are instrumental in fostering
market differentiation leading to premium prices. The resulting consumer recognition and
product reputation should therefore be safeguarded against unfair competition and imitations via
WTO-wide rules', according to an EC report.

Exploiting the fair-trade market

An increasing number of tea growers and plantation workers are benefiting from selling their tea
in the fair-trade system, with a 'Fairtrade' label. Products are certified by the UK-based Fairtrade
Foundation.

Fairtrade certified tea is sourced from tea estates and democratic small-farmer organisations
under terms of trade which include:

• fair wages and working conditions for employees;


• payment of a negotiated fair price to producers (estates and smallholder organisations);
• an additional premium for investing in social, economic or environmental programmes.

CaféDirect, a UK-based fair-trade company, sources tea from east Africa and Sri Lanka for sale
under its Teadirect label. With a 34% year-on-year growth by value, Teadirect is the fastest
growing tea brand in the UK retail market. Farmers who grow tea for Teadirect receive a

101
guaranteed minimum price of US$1.95/kg, some 40 cents a kg higher than the Mombasa
auction price in early 2005. In addition, a premium of €0.50/kg or €1.00/kg, depending on the
type of tea, is paid for the improvement of the socio-economic situation of the workers, their
families and communities.

A growing percentage of fair-trade tea, almost 40%, comes from small-scale growers. Another
major UK-based company Traidcraft buys chiefly from Uganda and Tanzania. More than 70 fair-
trade teas are now marketed, ranging from tea bags to loose tea, and including 'organic' and
green tea. In 2002, certified sales of fair-trade tea had an estimated retail value of £7.2 million,
about 1.3% of the market.

The Fairtrade label is monitored by the German-based Fair-trade Labelling Organisation


International (FLO), which sets standards under which tea can be sold, and is working with 51
tea-producing organisations from nine countries, including five in Tanzania, four in Uganda, and
one each in Kenya and Zimbabwe.

An FAO 'Tea Mark' was launched in December 2002. This is intended to be an international
mark to promote tea’s health benefits. The tea boards of India, Kenya and Sri Lanka have been
involved.

The Kayonza tea-processing factory in Uganda is an example of involvement in the fair-trade


system. The factory is collectively owned by about 3,100 smallholders, who together cultivate
1,300 hectares of tea, but most work very small plots of land (usually less than 0.2 hectares
under tea). They took over the factory after it was privatised.

In 1998, the farmers joined the Fairtrade scheme and by the middle of 2001 they had received
nearly $50,000 in premium funds. They used this to construct a health centre with electricity and
water, which services an area of 600 square km and invested in communications and email
facilities, as local people previously had to walk 100 km to make a phone call. Additionally, a 4
km road has been constructed to save some farmers a five-hour walk to take their green leaf to
the collection point, so that they can now spend more time on their land. The fair-trade premium
has also allowed ten new primary schools to be set up in the area.

Other trends

There are some other favourable trends: a Teadirect report refers to some 'amazing advances
in tea drinking'. It predicts that our cup of tea, what's in it and the way we drink it will have
changed beyond recognition by 2010: 'Tea looks set for a massive revival over the coming
years, helped along by new inventions and lifestyle trends'. Tea will also be put to new uses:
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'Trendy tea - tea will come to reflect our life-style choices and values. Hip bars in France, the UK
and the USA are already serving champagne teas and Earl Grey martinis'.

In an effort to make tea more convenient to prepare, the tea industry has introduced a ‘tea
tablet’. Invented in Japan, this could help to widen the market. Scientists at the world's largest
tea-research facility, in Assam, India, are also reported to have developed a tea tablet.
However, instant tea was a commercial failure when introduced into the UK about two decades
ago.

Auction trends

Auction centres could become redundant with technological advances. At present almost all tea
fields are located in regions where land-phone lines intermittently fail or do not exist. With the
development of the internet through mobile phones, however, and given that many plantations
are financed by large companies, tea estates will in the future be able to post real-time data
daily onto the internet, enabling a viable futures market.

The global process for bringing buyers and sellers more directly together is already taking place
with catalogue sales of premium tea. ACP producers need assistance to access information to
enable them to exploit on-line auctions.

SUGGESTIONS

If the tea industry has to choose between improving prices and controlling costs, the former is
the more difficult option, particularly in a global environment where transnational corporations
are exerting greater influence on the buying operations. The latter option, therefore, seems to
be the more practical alternative. Although wages and input costs per se are bound to rise, they
could, within limits, be balanced in terms of unit costs of production through enhanced
productivity -- not just that of labour but also the other factors of production that contribute to the
growing, manufacturing and marketing of tea. It is against this backdrop that this study on
productivity assumes crucial significance.

Cost control measures generally involve capital expenditure as, for example, in material
handling equipment, heat recording systems, energy saving devices and so on. In this sense,
these are also components of the productivity approach.

Conclusion

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The art of tea cultivation in Bangladesh began over a century and a half ago in the 1840s near
the Chittagong Club. The first tea garden to be established was Malnicherra in Sylhet in 1854.
Its commercial production began shortly thereafter in 1857.

Today, tea is the second most consumeable beverage in the world after water. A total of
3,200,000 tonnes of tea were produced worldwide in 2004, (Source: FAO website www.fao.org)
India, China, Sri Lanka and Kenya, in that order, are the major producers of tea leaves.

Tea global market seems defined by radical change, both good and bad. The most radical
disruption was the Afghan and Iraqi war, which hurt Asian wholesale producers. Remarkably,
good news will likely come out of the Iraqi situation. Nations of that region consume high
quantifies of tea per person, and Iraq may become again a stable base for tea consumption.
Better yet, democracy may generate a larger middle-class society which has the money to buy a
higher quality tea than that previously consumed. And if Iraq and Afghan becomes a regional
role model as the U.S. government plans, then a future generation of newly middle-class tea
drinkers may be created in many high-consumption nations, the best news for marketing bulk
amounts of branded tea, especially from India and Sri Lanka. While the Iraqi war is "loud" news
for tea markets, a quieter global development remains remarkably low interest rates. Some of
the largest tea companies borrow heavily, reducing their ability to budget for marketing and
advertising.

Tea consumption in Bangladesh is increasing 3 per cent per annum but its production is
increasing 1 per cent only. If tea production was not increased Bangladesh would become a
tea-importing country after 2020. Bangladesh is now exporting 12,000 Metric Tons (MT) tea per
annum, which earns Tk 90 crore.

According to the Bangladesh Tea Board currently Bangladeshi tea gardens are producing
56,000 MT of tea per annum. Of this 12,000 MT is exported. Bangladesh’s current population
growth rate is 1.6 per cent. Experts consider that in 2020 Bangladesh’s population will reach to
18.10 crore. If the tea consumption growth rate continues, in 2020 tea consumption will reach to
6.50 crore kg while its production will reach only to 5.41 crore kg.

The government is considering framing of a 20-year strategic plan for development of the tea
sector and to increase its production. The project will cost Tk 867. 32 crore. of them Tk 752
crore will be spent for implementation of strategic plan, Tk 64 crore will be spent for research
and other Tk 51 crore will be spent for trade and marketing strategy.

The strategic plan suggests that total land for tea production has to be increased to 69,000
hectares from existing 50,000 hectares. It also suggests that tea production per hectares is

104
1748 kg from 1176 kg has to be increased as early as possible. It also recommends increase of
quality of tea and to export 40 per cent of total tea production.

It is concluded that the tea marketing of Bangladeshi Tea to International market has both
prospects because of Tea marketing systems in Bangladesh have undergone significant
changes over the last three or four decades, keeping in line with changes in quantity, quality,
and market structure and problems due to the world tea export increased by 50,000 tons which
is more than the production in 2003, but production of the major exporters such as India and
Bangladesh has decreased. The FAO report was prepared for the Intergovernmental Group on
Tea meeting in Bali (20-22 July 2005) to review the current world tea market and its medium-
term outlook.

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translation of modern-day editon (1987) by Olga Lomová (translator): Kniha o čaji.
Spolek milců čaje, Praha, 2002. (in Czech)
• John C. Evans (1992): Tea in China: The History of China's National Drink, Greenwood
Press. ISBN 0-313-28049-5

105
• Kit Chow, Ione Kramer (1990): All the Tea in China, China Books & Periodicals Inc.
ISBN 0835121941 References are to Czech translation by Michal Synek (1998):
Všechny čaje Číny, DharmaGaia Praha. ISBN 80-85905-48-5
• Stephan Reimertz (1998): Vom Genuß des Tees : Eine eine heitere Reise durch alte
Landschaften, ehrwürdige Traditionen und moderne Verhältnisse, inklusive einer kleinen
Teeschule (In German)
• Jane Pettigrew (2002), A Social History of Tea
• Roy Moxham (2003), Tea: Addiction, Exploitation, and Empire
• The Tea Council (UK)
http://www.teacouncil.co.uk
• FAO (www.fao.org)
http://www.fao.org/es/ESC/en/20953/21035/index.html
• India Infoline feature 'Indian Tea Sector: "The cup of joy"', December 9th 2004
http://trade.indiainfoline.com/Commexwebsite/olw/cup.pdf
• The EU's position on geographical indications (GIs)
http://europa.eu.int/comm/trade/issues/sectoral/intell_property/argu_en.htm
• The Tea Market: A Background Study Oxfam 2002
http:/www.maketradefair.com/assets/english/TeaMarket.pdf
• EC: 'Agricultural Commodity Chains, Dependence and Poverty - A proposal for an EU
Action Plan', February 12th 2004, COM(2004)89 final.
http://trade-info.cec.eu.int/doclib/html/117111.htm
• Fair-trade Foundation, London: 'Producer Profile, Kayonza Growers Tea Factory,
Uganda'
• http://www.fairtrade.org.uk
International Tea Committee
http://www.intteacomm.co.uk
• Salman Ispahani, Member, Bangladeshiya Cha Sangsad
• Orman Rafay Nizam and B. R. Nizam, Membesr, Tea Traders Association, Bangladesh.
• www.wikipedia.com/tea

7%

106
Source: Bangladesh Tea Board Annual Report 2004
107
Source: Bangladesh Tea Board Annual Report 2004

108
Source: Bangladesh Tea Board Annual Report 2004

Source: Bangladesh Tea Board Annual Report 2004

109
Source: Bangladesh Tea Board Annual Report 2004

Source: Bangladesh Tea Board Annual Report 2004

110
Source: Bangladesh Tea Board Annual Report 2004

111
Source: Bangladesh Tea Board Annual Report 2004

112
113