Tea consignments pile up at brokerage houses as the beverage auctions see fewer buyers than usual amid the coronavirus pandemic
The coronavirus outbreak is causing a rare stir in the usually staid local tea market with fewer buyers than usual, while domestic consumption of the beverage known for its immunity-boosting properties climbs.
Around 17 lakh kilograms of tea remained unsold in the first three auctions of the current 2020-21 auction year which is worth around Tk34 crore.
The dull sales put the tea manufacturers, businessmen and brokerage houses in a fix and raised concern for 3 lakh workers at different tea gardens over their jobs. Meantime, piled up unsold tea is losing its quality.
Chattogram and Moulvibazar host four tea auctions per month with 12 brokerage houses taking part. The tea board then assesses the quality and determines their grades and prices. The grades and prices are then put on brokerage house catalogues.
Buyers registered with the Bangladesh Tea Board start the bidding in line with the prices mentioned in the catalogues.
During the countrywide virus-led shutdown, the Bangladesh Tea Board postponed the last two tea auctions of the 2019-20 auction year, leaving 9 lakh kilograms of tea unsold.
The first tea bidding of the new auction year was held last May in the port city Chattogram. With new consignments, the brokerage houses also brought out the old and unsold tea at the auction.
However, the maiden auction for the 2020-21 year saw few buyers from Chattogram. The bidding had more than 3 lakh kilograms of tea unsold. And after the third auction on June 8, the amount of unsold tea reached 17 lakh kilograms.
Brokerage houses still have 3 lakh kilograms of tea from the previous auction year in the unsold consignment, said Mainuddin Hasan, Chairman of the Tea Traders Association of Bangladesh.
Bangladesh has 167 tea gardens in Chattogram, Sylhet, Sreemangal, Rangamati and Bandarban. Of them, Chattogram has 22 tea estates, the highest among these regions. More than 3 lakh workers are totally dependent on the gardens while another 5,000 small-scale farmers grow tea in the northern part of the country and south-eastern district Bandarban.
Sujit Bhattacharyya, senior manager of Produce Brokers, told The Business Standard that the market currently does not have enough demand for tea. Only major distributors are taking part in the biddings, and small and medium traders have refrained from doing so.
"The small traders are not distributing tea amid the pandemic as they are concerned over losing capital," he added.
Mohammad Kibria of KS Brokers Ltd said the virus-led countrywide shutdown on March 26 prompted the closure of shops, hotels, restaurants, tea stalls, convention and party centres, which are the topmost points of tea sales.
"The last three auctions had around half of the usual buyers. Therefore, the manufacturers failed to pick up sales," he said, adding that a prolonged virus situation would put the sector in a long-term crisis.
According to the board, Bangladesh's tea production in 2019 was 96.07 million kilograms of yield. The country produced 1.83 million kilograms of tea in the first three months (January to March) this year.