The Financial Express

Smuggling threatens tea trading

Steps sought to stop illegal imports

| Updated: September 17, 2019 15:24:14

Evaly and Fianancial Express Evaly and Fianancial Express
— File photo — File photo

Tea smuggling through border has constituted a potential threat to the business of local manufacturers, industry insiders said.

The smuggling of various items, such as tea, has increased in volume through frontier areas, affecting the local tea market adversely, they added.

The troubled tea gardeners have thus demanded that the government take prompt measures to protect the potential industry.

The authorities have seized more than 50,244 kilogram of tea in the past six months from border belts, mainly in north-west and east parts of the country.

Industry people said the smuggled tea would be much higher than the seized volume.

Meanwhile, Bangladesh Tea Association (BTA), the apex body of tea makers, has already pleaded with the authorities to act promptly against tea smugglers.

Former BTA chairman Md Safwan Choudhury said tea smuggling is grossly affecting the local industry.

"Even prices of our tea have been falling at weekly auctions in Chattogram," he told the FE.

Mr Safwan said the average auction price was Tk 275 a kg last year. It now ranges from Tk 205 to Tk 210.

Even sales of many leading brands have dropped as a result of the same testing problem, he added.

Mr Safwan said 'border hat' is also one of the potential sources, making a snowball effect on the local market.

"We're in favour of border hat but not at the cost of local tea industry," he uttered.

Another BTA source said they have already written to commerce and home ministries, and Border Guard of Bangladesh (BGB) for immediate action to this end.

A source said such tea is available with stalls and bazaars across borders and also with mobile or makeshift stalls.

Seeking anonymity, a BGB director said, "We generally seize low-quality Indian packet tea at border points.

Tea production globally stood at 5,463 million kg in 2016, when Bangladesh's share was 1.56 per cent.

It was 0.28 percentage point higher than that in 2015, according to the central bank quarterly review on tea.

According to the statistics on major tea-producing countries, China held the first position followed by India, Kenya and Sri Lanka in 2016.

Bangladesh produced around 82.13 million kg in 166 tea gardens in 2018, much higher than the 72.39 million kg annual production target, said Bangladesh Tea Board.

In 2018, an estimated 90.45 million kg of tea was consumed and 0.65 million kg of tea was exported.

Currently, the country's tea production stood, on an average, at 1320 kg per hectare by using 50 per cent of the land, the BB review mentioned.

Domestic demand for tea is rising rapidly due to urbanisation, a change in consumer taste along with population growth.

Market diversification is necessary to increase the tea production and to increase the contribution of tea in national export earnings, read the review.

The primary importers of tea from Bangladesh were the United Arab Emirates, Pakistan, the USA, Saudi Arabia, Kuwait, Bahrain, Japan and China in January-March 2019.

During the period, the auction value of medium and plain tea was Tk 170-195 and Tk 160-175 per kg respectively which was Tk 225-240 and Tk 130-145 in the previous quarter.

It was Tk 185-195 and Tk 165-180 per kg respectively of the same quarter in 2018, showed the BB review.

Once a tea exporter, Bangladesh has recently turned into an importer of the popular commodity.

It imported tea to the tune of 6.5 million kg in the 2018 calendar year.

When asked, Bangladesh Tea Traders Association vice-president Md Yusuf could not tell about the retail prices of tea locally.

[email protected]

Share if you like