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The Financial Express

Tea producers seek 20pc subsidy to boost exports

| Updated: January 03, 2021 12:51:50


Tea producers seek 20pc subsidy to boost exports

The apex body of tea producers has requested the government to provide a 20 per cent subsidy, in addition to the existing export incentive facility to the tea sector, with a view to boosting the exports of the widely-consumed drink, officials said.

The Bangladesh Tea Association (BTA) recently sought the facilities and urged authorities to take immediate necessary steps in this regard.

The Covid-19 has put a negative impact on the tea sector. The cash flow and financial capacity of the tea industry declined, industry insiders said.

As a result, it was very difficult for the tea sector to continue production, pay wages, collect capital and maintain jobs, they added.

They also feared a long-term negative impact on the tea sector. They said it might not be possible for them to complete the development work of the sector with limited resources due to revenue deficit and non-payment of loans.

The sector had been facing multifarious problems including continuous price fall, and unsold tea, they mentioned.

The volume of the country's tea export would rise many times, if the government provided subsidy and retained the existing export incentive, considering tea as an agro-processing item, they also said.

The fund sizes of industries and services sector and small and medium industrial enterprises are Tk 330 billion and Tk 200 billion respectively.

Earlier, BTA chairman M. Shah Alam had requested the commerce ministry to bring the pandemic-hit tea industry under the government's fiscal stimulus package. The association had also sought additional working capital and a special fund for the sector at 4.5 per cent rate of interest annually.

The tea sector is a prioritized industrial sector under the National Industrial Policy 2016.

Bangladesh produced around 96.07 million kilogrammes (kg) of tea from 167 gardens in 2019, of which 95.209 million kgs were consumed locally.

The government has set a target to increase tea production to 140 million kg by 2025, aiming to meet the country's growing demand and increase its exports, according to the commerce ministry.

The volume of export was 0.60 million tonnes in 2019.

Over 98,578 permanent and 29,666 temporary workers are involved with the tea industry. Of them, 50 per cent are women, according to BTA documents.

Around 0.5 million workers and their dependants are living in the tea garden areas. Some 167 tea estates and tea gardens are registered with Bangladesh Tea Board.

Currently, the country's tea production stood, on an average, at 1320 kg per hectare with the use of 50 per cent of the land, a Bangladesh Bank (BB) review mentioned.

Domestic demand for tea is rising rapidly due to urbanisation entailing, 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 to national export earnings, reads 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.

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.

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