Tea, a non-alcoholic beverage, has become an integral part of Bangladeshi culture for many generations, symbolizing happiness, energy, and a soothing escape from everyday challenges. In addition to its delightful taste, tea possesses a myriad of medical properties. Tea exports have played a crucial role in facilitating the inflow of foreign currency for Bangladesh. Nevertheless, with the increasing disposable incomes of the population and the smooth integration of tea into their daily routines, there has been a significant spike in domestic demand. Despite achieving a great tea yield of 96,500 tonnes in 2021, the domestic demand has surpassed the available supply, leaving limited scope for significant exports.
The Bangladeshi tea sector has seen turmoil in recent years as a result of labor demonstrations, largely focused on salary inequalities and other obstacles. However, the industry’s landscape is abundant with untapped opportunities for growth and advancement. If these routes are thoroughly investigated, they have the potential to increase tea output and strengthen its contribution to boosting export numbers.
The tea industry on a global scale
The tea industry has experienced significant growth worldwide due to several factors such as diversified consumer preferences, high-quality tea options, perceived health benefits, and increasing wealth. The Food and Agriculture Organization (FAO) provides insight into the worldwide tea trade, which is estimated to be worth around USD 9.5 billion. Additionally, the total annual global tea output exceeds USD 17 billion. It is worth mentioning that countries engaged in tea production have significantly increased their output. This can be attributed to the rising demands from emerging economies, which have stimulated growth in the industry. Consequently, this has led to the creation of employment opportunities and the promotion of empowerment within these countries. In 2021, the global tea output reached a peak of around 6.5 million tonnes, indicating a little increase compared to the 6.3 million tonnes produced in the preceding year. China is the leading tea-producing nation, accounting for a significant 47% of the global tea output. Following China, India produces 3.1 million and 1.33 million tonnes of tea, respectively. Nevertheless, the business is currently facing a variety of obstacles due to the impacts of the COVID-19 epidemic and the Russo-Ukrainian conflict, resulting in disruptions throughout the supply chain.
The Historical Origins of Tea in Bangladesh
The origins of tea cultivation in Bangladesh can be traced back to a period spanning more than 180 years. The establishment of the “Malnicchara Tea Garden,” the first commercial tea garden in the region, located near the airport road in Sylhet, signifies a significant milestone for the tea business. Currently, Bangladesh possesses a total of 167 commercial tea farms spanning across 2,79,507 acres of land. These tea estates combined produce an average yearly yield of 67,400 tonnes. The ecosystem in question involves a substantial labor force of 1.5 million individuals employed in the tea sector, whose contributions have significant impacts across other domains. Significantly, there has been a remarkable increase in the consumption of domestic tea, with a substantial rise from 18,190 tonnes in 1990 to an astonishing 67,031 tonnes in the year 2016.
Despite seeing a gradual increase in tea production, with a transition from 45,190 tonnes in 1990 to 58,050 tonnes in 2016, this growth was insufficient to meet the local demand and the necessary conditions for successful exports. The manifestation of this disparity may be observed in the declining export quantities, which decreased from 26,970 tonnes in 1990 to a significantly lower amount of 77 tonnes in the year 2016. Simultaneously, there was a significant increase in the importation of tea, with the quantity rising from 2,000 tonnes in 2010 to a substantial 8,200 tonnes by 2016. Within the current context, the tea industry holds a significant position as a contributor to the national GDP, accounting for approximately 1%. Moreover, it exerts influence over a notable portion of global production, amounting to approximately 1.89%. The driving force behind increased production emanates from key regions including Moulvibazar, Habigonj, Sylhet, Chittagong, and Panchagarh.
The cultivation and development of the tea industry
The Bangladesh Tea Board, in conjunction with the Bangladesh Tea Research Institute and the Project Development Unit, plays a pivotal role in establishing and maintaining the structure of the Bangladeshi tea sector. Together, these entities create the bedrock of regulatory strength. One notable aspect within this ecological system highlights the labor dynamics observed in tea plantations, characterized by a longstanding pattern of exploitation and recent instances of protests advocating for fair wages. The revised daily wage of 170 BDT was achieved as a result of the proactive intervention of Prime Minister Sheikh Hasina. Nevertheless, it is crucial to reflect upon and improve the living circumstances and basic amenities provided to tea laborers.
The marketplace exhibits a diverse array of brands, including Ispahani Mirzapore Tea, James Finlay Bangladesh, Kazi & Kazi, Duncan Brothers Bangladesh Limited, Abul Khair Group, and Orion Group, which are particularly prominent. One of the leading brands in this category is Ispahani Mirzapore, which holds a significant market share of 50% in the nationally branded tea market and an outstanding 80% dominance specifically within the tea bag segment. The year 2021 has seen a notable presence of the industry in the market, with a market size valued at BDT 3500 crore and export revenues amounting to BDT 180.57 million. Bangladesh’s position in the global tea industry is characterized by tea exports valued at USD 4.33 million, which ranks it as the 56th largest exporter worldwide. Pakistan has the prominent position as the leading importer.
Emerging Challenges
The tea industry in Bangladesh is characterized by a range of complex issues. In the context of declining export volumes, the presence of outdated irrigation systems poses a significant hindrance to productivity. The potential risks associated with over dependence on a single labor source, together with the consequences of climate change, are further exacerbated by a lack of interest in high-quality teas within the local community.
Exploring Routes to Expansion and Advancement
Upon careful examination of the obstacles at hand, the intricate fabric of the tea industry reveals a multitude of potential pathways for expansion. The combination of local and global demand for both traditional and premium teas has sparked an increased production effort, which has the potential to yield significant financial gains. Governmental programs specifically designed to promote tea growing in the unexplored regions of northern territories hold promise for addressing the gap between tea demand and supply. The strategic shift towards expanding into the skincare and beauty industry through the utilization of tea by-products is inherently attractive, as it resonates with both domestic and foreign audiences. This attractiveness is strengthened by tea’s established reputation as a promoter of comprehensive well-being.
Approaches for Unveiling Future Possibilities
The achievement of a strong and sustainable future for Bangladesh’s tea industry is contingent upon the enhancement of domestic production. The aforementioned necessity aligns with the process of modernizing irrigation systems, strategically replacing outdated tea bushes, and adopting a mutually beneficial approach towards utilizing natural fertilizers. Simultaneously, the enhancement of pay and training for labour will inevitably stimulate productivity. The enhancement of land utilization, the optimization of supply chains, and the resuscitation of marketing channels for novel tea variations are crucial factors in driving the business towards higher levels of success.
In conclusion, the perspective of Bangladesh’s tea industry is situated at the intersection of obstacles and opportunities, indicative of its untapped potential. The development of these potential opportunities, the fostering of creativity, and a harmonious alignment with worldwide patterns collectively establish a framework for a prosperous tea industry—one that satisfies domestic demand while substantially enhancing the international tea market.