The Tea Industry in Bangladesh: A Comprehensive Overview

Tea, the second-largest cash crop in Bangladesh after jute, is an essential part of the country’s culture and economy. In this article, we provide an overview of the tea industry in Bangladesh, including its history, current state, and future prospects.

Overview

History

Tea cultivation in Bangladesh began during British rule, with the first commercial tea garden, ‘Malnichhara Tea Garden,’ established in Sylhet in 1854. During the tenure of Bangabandhu Sheikh Mujibur Rahman, the head office of the Tea Board was established in the Motijheel area of Dhaka. After the war in 1971, the abandoned tea gardens were restored, and the Bangladesh Tea Industries Management Committee was formed.

Current State

According to the Bangladesh Tea Board, there are 167 commercial tea estates and tea gardens in Bangladesh, covering 2,79,507 acres of land and employing about 1.5 lakh workers. Bangladesh produces 3% of global tea, and in 2021, the market size of the tea industry was about BDT 3500 crore. The five types of tea produced in Bangladesh are Green Tea, Black Tea, Oolong Tea, Instant Tea, and White Tea. Abul Khair Consumer Products Ltd is the top company in tea exports, followed by Kazi & Kazi Tea Estate Ltd., Halda Valley Food & Beverage Ltd., M.M. Ispahani Limited, Meghna Tea Company, and The Consolidated Tea & Lands Co. (BD) Ltd.

Future Prospects

The tea industry in Bangladesh has great potential for growth, given the increasing demand for tea both locally and globally. Local and foreign brands are working to popularize more tea categories, and the government is providing support to the industry. With these efforts, the tea industry is expected to contribute more to Bangladesh’s economy in the future.

Reasons Behind the Growth of Bangladesh’s Tea Industry

Favorable Climate and Environment

The tea industry in Bangladesh has been thriving due to its favorable climate and environment. The country’s warm and humid climate is ideal for tea production, and the tea plants grow faster when there is more or less rain throughout the year. The hilly regions of Sylhet, Moulvibazar, Habiganj, and Chittagong have the highest tea production in Bangladesh. The average rainfall in Bangladesh is 203 cm per year, and the average temperature in the country is 26.01 degrees Celsius, which are both suitable for tea production. These factors have contributed to the growth of the tea industry in Bangladesh.

Increasing Domestic Consumption of Tea

Over the years, the per capita income of the people of Bangladesh has increased, resulting in changing consumer preferences. The number of middle-class and upper-middle-class people is also growing in Bangladesh, leading to an increase in the per capita tea consumption of the people of Bangladesh. According to the Bangladesh Tea Board, in 2019, 99% of the tea produced in Bangladesh was consumed locally. However, in 2021, the country imported 6 lakh 256 thousand kg of tea. Additionally, people are becoming more aware of the health benefits of different types of tea, contributing to the rise in domestic tea consumption. The increase in domestic tea consumption is one of the reasons behind the growth of the tea industry in Bangladesh.

Government Initiatives and Support

The Government of Bangladesh has played a significant role in supporting the growth of the tea industry in the country. The government has implemented several plans and initiatives to maintain the growth of the tea industry. According to the Bangladesh Tea Board, Bangladesh was able to export more than 2.1 million kg of tea in 2020, and the government aims to increase this to 10 million kilograms by 2025. The government has also been supporting the development of new tea estates in the country’s northern districts and organizing and motivating small-scale tea farmers to expand their production. The farmers are provided with necessary technical and financial support and training for their skill development. Moreover, the government has set up a tea-processing factory in the project area as planned. If everything goes as planned, Bangladesh’s tea production will reach 140 million kg by 2025, according to Dr. Nazneen Kawshar Chowdhury, Joint Secretary, Bangladesh Tea Board.

Current Trends and the Government’s Push for Export

New Flavors

Tea is a beloved beverage in Bangladesh, with raw tea, liqueur tea, and milk tea being the most commonly consumed types. However, tea shops across the country are experimenting with adding different spices and ingredients such as ginger, cinnamon, basil, and lemon leaves to cater to consumers’ diverse preferences. Major tea manufacturing companies like Ispahani, Kazi & Kazi, and Fresh are also introducing new flavors by mixing and processing other ingredients with regular tea. These new flavors include Black Tea, Lemon Tea, Green Tea, Ginger Tea, Iced Tea, Tulsi Tea, Masala Tea, Amloki Tea, Triphala Tea, Caffeine & Non-Caffeine Tea, and many more.

Government Pushing for Rising Exports

Despite the high demand for tea in Bangladesh, the government is striving to increase tea production and exports. The Bangladesh government has set an ambitious target to increase tea production by 46% to 14 crore kg by 2025. However, Commerce Minister Tipu Munshi has acknowledged that exporting tea remains a challenge even after meeting the local demand. To overcome this, he is urging tea garden and estate owners to come forward and collaborate with the government, which will provide necessary assistance. The government is working to establish new tea gardens, innovate new tea variants, and ensure fair prices. The ultimate goal is to produce 14 crore kg of tea, of which 1 crore kg can be exported after meeting the estimated local demand of 13 crore kg by 2025.

Challenges Facing Bangladesh Tea Industry

Lack of Investment

One of the significant challenges faced by Bangladesh’s tea industry is the lack of proper investment. The maintenance of tea gardens and estates, as well as the repair of factories and machinery, requires a considerable amount of money. However, the country’s tea industry does not receive sufficient investment. Furthermore, even hundred-year-old tea gardens require investment for replanting new tea seedlings. But since these tea plants take 5 to 7 years to mature, private investors are often reluctant to invest, which hinders the industry’s growth.

Global Warming

The impact of global warming is another significant challenge faced by Bangladesh’s tea industry. Weather contamination and excessive heat can reduce the yield and quality of tea leaves. Although Bangladesh receives adequate rainfall from April to October each year, heavy rains, hailstorms, thunderstorms, occasional droughts, and increased humidity caused by global warming have resulted in low tea yields. Additionally, the absence of rain, excessive heat, and dust during certain times of the year also reduce the plant’s output, hindering the growth of the industry.

Poor Labor Conditions and Low Wages

The poor working conditions and low wages of tea workers are another challenge for the tea industry in Bangladesh. The daily wage of tea workers in Bangladesh was only BDT 102 per head in 2018, and they were only given 3 kg rations per week. While the daily wage per capita of tea workers was increased to BDT 117 per head in 2019 based on an agreement between tea workers and garden owners, the wages of tea workers are still among the lowest in the world. The recent fixed wage model of BDT 120 for Grade A workers, BDT 116 for Grade B workers, and BDT 116 for Grade C workers is still significantly lower than wages in other labor-intensive industries. Due to such low wages, tea workers lose their motivation to work, thereby affecting the quality of tea.

Low Customer Interest in High-Quality Tea

Although broken grade FP or flowery pekoe tea is of high quality, its price is high. However, since the local demand for regular refined and fermented black tea is high in Bangladesh, people are not accustomed to consuming high-quality tea. As a result, such tea is primarily exported to various countries in Europe and America. This lack of interest in high-quality tea by local consumers is a challenge for the growth of the tea industry.

Opportunities in Bangladesh’s Tea Industry

High Local & International Demand

The tea consumption in Bangladesh is on the rise, and so is the global tea consumption. Consequently, there is a substantial demand for Bangladeshi tea brands in the global market. In 2020, Bangladesh exported 21,70,000 kg of tea to 22 countries worldwide, which is about 260 percent more than the previous year. Although Bangladesh cannot export enough tea after meeting the local demand, increasing production can lead to more foreign revenues through tea exports in the future.

New Variants

Bangladeshi tea brands can tap into the potential of producing different variants and flavors of tea besides traditional black tea. This approach can cater to the premium tea sector, which is a market with excellent growth potential. Flavored infused teas are trendy and in demand in western countries and can be marketed as gift packages in the domestic market or exported abroad, creating good export opportunities for Bangladeshi brands.

Skincare Product

Tea is not just for beverages; it is also used in skincare and beauty products. Local brands can leverage this by producing tea-mixed skincare products as a by-product of tea leaves, potentially creating an entirely new industry in Bangladesh based on the tea industry. This can enable Bangladesh to export skincare and beauty products alongside tea leaves.

Tea Cultivation in Flat Land

While hilly areas are ideal for tea cultivation, Bangladesh has been cultivating tea in the plain lands in recent years, particularly in the northern region. Tea production has already begun in Cox’s Bazar, Bandarban, and Khagrachari. About 12% of the total tea produced in Bangladesh comes from these flat land tea gardens. If the amount of tea cultivation in plain lands can be further increased in regions such as Mymensingh, Netrokona, Sherpur, Jamalpur, and Tangail, Bangladesh’s tea industry can grow even more.

Enhancing Bangladesh’s Tea Industry: Recommendations

Although tea production in Bangladesh has increased, its export has decreased over the years. To capture the global market, Bangladesh must increase tea production and export more than the local demand. Modernizing tea cultivation, irrigation arrangements, drainage system, and machinery used in the production process can help increase production.

Increasing Tea Production

Preparing lands where tea has not been cultivated before and making it suitable for tea cultivation will increase tea exports, especially on flat lands in several other districts like Panchagarh Tetulia and Thakurgaon in North Bengal. Adequate drainage systems should be ensured to remove irrigation water or rainwater, and modern and artificial irrigation arrangements should be made to overcome high humidity.

Modernizing Tea Cultivation

The traditional British culture of tea cultivation in Bangladesh must be modernized. The machinery used after collecting tea leaves from the tree in various processes should be further modernized, and tea trees should be grown in uncultivated hilly areas.

Fair Wages and Adequate Facilities

The tea industry employs a large number of people, and to provide these workers with fair wages and adequate facilities, the government must take necessary steps along with the owners of tea gardens and tea estates.

If all these issues are implemented, Bangladesh’s tea industry will become more self-sufficient in the future. Moreover, the volume of tea exports will increase, leading to earning more foreign revenues through tea export in the future.