More buyers are attending tea auctions in Chattogram and the brokerage houses are making more sales
The domestic tea market is bouncing back on rising demand – shaking off the novel coronavirus shock which caused a rare stir in the usually steady tea sales. Auctions that have taken place in the current auction year show the tea sales are on the rise and have surged more than threefold within two months.
Industry people said tea would recover from the Covid-19 fallout and return to normalcy soon if the uptrend in sales continues.
Tea auctions are being held at the port city of Chattogram's Agrabad-based World Trade Centre – maintaining health and safety guidelines amid the pandemic. Though the auctions previously witnessed fewer buyers, the number have increased as the virus situation has improved. And tea sale offers are also climbing gradually.
According to the Bangladesh Tea Board, nine auctions have taken place from May 18 to July 20 in the new auction year. During the bidding, brokerage houses offered 2.32 crore kilogrammes of tea so far.
Tea estates send their yields to brokerage houses. The tea board then assesses their 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.
On May 18, at the first auction, 11 lakh kilogrammes of tea were offered for sale while the amount at the ninth bidding on July 20 rose to 37 lakh kilogrammes.
The average price of sales at eight biddings stands at Tk184 per kilogramme while the nine biddings offered tea worth Tk426.88 crore.
Deputy Manager of the Karnaphuli Tea Estate Rashed Mahmood said tea sales were improving and their consignments sent to the brokerage houses were being sold easily.
"We will be able to counteract the virus fallout soon if things keep improving at this pace," he added.
Echoing Rashed, Tea Traders Association of Bangladesh Chairman Mainuddin Hasan told The Business Standard that every auction was exhibiting market improvement.
"Sale offers are on the rise and good quality tea consignments are being sold promptly," he added.
Sujit Bhattacharyya, senior manager of Produce Brokers, told The Business Standard that demand for tea fell owing to the virus situation at the beginning of the new auction year. The market is improving slowly.
"Restaurants and tea stalls have reopened as the shutdown ended, increasing the demand for tea. Tea auctions are reflecting the businesses reopening," he commented.
However, the auctions have shown a downtrend in tea prices.
Arifur Rahman Shaheen, director of Purba Bangla Brokers Ltd, said the virus outbreak was one of the major causes for the price fall. Additionally, less rainfall at the beginning of the year and pest attacks on tea resulted in low quality production which also contributed to the price fall.
While contacted, Bangladesh Tea Board Secretary Kula Pradip Chakma refused to comment in this regard.
According to the board, Bangladesh's tea production in 2019 was 96.07 million kilogrammes of yield. The country produced 21.81 million kilogrammes of tea in the January-June period of this year.
The country has 167 tea gardens throughout: Sylhet, Habiganj, Moulvibazar, Chattogram, and Panchagarh. More than three lakh workers are involved in tea growing at those gardens. Additionally, 5,000 farmers are involved in tea cultivation in the northern region and Bandarban.
The last two consecutive tea biddings in the last 2019-20 auction year were suspended due to the novel coronavirus outbreak. The brokerage houses brought out the old and unsold tea for auction in the new year.