Despite the ongoing tea production season in Bangladesh, the lack of consistent and adequate rainfall suitable for tea cultivation has led to decreased tea production, affecting the country’s tea auctions. Tea estate owners have supplied less tea in the last five consecutive auctions. Industry insiders fear that if this trend continues, the annual production target for the tea sector may not be met.
Bangladesh has 168 tea estates, with small-scale tea growers from the northern region also contributing tea from their own plantations to auction markets. Among the country’s three tea auction centers, the century-old Chattogram’s international tea auction is the most vibrant. In the past five auctions, 3.2 million kilograms less tea has been offered for sale compared to last year. Estate and broker company officials cite insufficient production as the reason behind the lower supply at auctions.
According to sources, tea cultivation in Bangladesh heavily relies on natural factors. The peak tea production season spans from June to October during the monsoon. During this period, the highest quantity and best-quality tea is produced for auction. Tea requires specific temperatures, consistent and moderate rainfall, and sunny weather. Nighttime rain and daytime sunlight are particularly conducive to good tea production. However, this year, intense heat combined with irregular rainfall has hindered estates from producing the expected amount of tea, thereby impacting auction supplies.
Jahangir Alam, the coordinator of the Udalia Tea Estate in Chattogram Valley, told Bonik Barta, “Even though it has rained, tea production hasn’t met expectations. This year, instead of regular rainfall, there have been short bursts of heavy rain, leading to lower production in estates. However, with rain continuing toward the end of the season, there is hope that production might increase in the final months. Estates have not yet given up hope on meeting their production targets.”
Auction-related sources say that reduced tea supply has increased prices this season. Last year, the price per kilogram of tea fell below BDT 200 during this period. However, this year, the price has remained above BDT 200. In the latest 21st auction, the average price per kilogram of tea was BDT 218.45. The price slightly decreased to BDT 215 per kilogram in the 22nd auction. Moreover, according to brokers, a category-based minimum price level has been set for auction tea marketing this season, preventing prices from falling further.
According to the Bangladesh Tea Board, the tea production target for this year is set at 108 million kilograms. In 2023, a record 102.9 million kilograms of tea was produced in the country. Until August this year, 49.53 million kilograms of tea were produced, while production until August 2023 was 54.7 million kilograms. With tea production lower than last year during the same period, there is uncertainty about meeting this year’s target.
Anjan Deb Barman, Senior Manager at National Brokers Limited, told Bonik Barta, “This season, tea estates are receiving good prices at auctions. Typically, when prices are high, more tea is supplied to auctions. However, supply has remained low due to weather conditions and lower-than-expected production. With limited supply during the peak season, demand from buyers at auctions is expected to continue until the end of the auction year. As a result, buyer companies are purchasing about 70-75 percent of the tea at each auction.”