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Tea Industry in Bangladesh: Marketing System and Price Behaviour

S. A. Sabur
Professor
Professor, Dept. of Co-operation and marketing, Bangladesh Agricultural University,Mymensingh,

M. M. U. Mollah
Scientific Officer
Scientific officer, Bangladesh Jute Research Institute, Dhaka

M. A. K. Azad
Associate Professor
Associate Professor, Dept. of Economics, Islamic Unversity, Kustia.

Abstract/ Executive Summary:

This study is an attempt to examine the existing processing, marketing system and price behavior of tea in Bangladesh. It is mainly based on primary data collected from 10 estates and 46 traders. Price data were collected from secondary sources. Processing cost differs significantly among different types of estates. Tea is sold in two ways: direct sale from the estate and sale by auction. The participants involved in the tea marketing system are the tea estate, broker, bidder, exporter, manufacturer, blender, distributor, wholesaler and retailer. Marketing cost was the highest for bidders and the lowest for blenders. Net margin and return on investment was found highest for retailers. Profit from packet tea was greater than that from open tea. Price instability, inadequate storage facilities, strike, lack of market information, scarcity of plywood, shortage of capital, higher amount of charges and barriers created by law are the important problems faced by the tea producers and traders. Tea production increased mainly due to rise in yield and growth rate of former period was much higher than that of latter period. Although nominal price increased but real price remained more or less same during the study period. Nominal price rise in the first period was found higher than that of second period. Marketing margin in the first period remained static whereas it went up significantly in the latter period. Seasonal price and quantity variations were not related and variation in quantity was higher than that of price.

Keywords: Tea industry,Marketing system, Price behaviour

Location: Habigonj and Moulavi Bazar districts.

Start Date: 00-00-1998

End Date: 00-00-1999

Program Area: Socio-economic and Policy

Commodity: Tea

Objectives:

To examine the existing marketing system and price behaiour of tea in Bangladesh.

Methodology:

This study is based on primary data collected from 10 estates, one broker company, 8 bidders, 10 wholesalers, 12 retailers and 5 blenders. The information of the tea estate was collected from Habigonj and Moulavi Bazar districts. All types of tea estates were classified into four categories such as A (producing above 180000 kgs annually), B (producing more than108000 to 180000 kgs), C (producing 27000 to 108000 kgs) and U (producing below 27000 kgs). Ten tea estates taking two each from Sterling company Ltd., Bangladesh Tea Board (BTB), National Tea Company (NTC), Private Limited Company, and Proprietary ownership were chosen purposively. Out of ten selected tea estates, eight were A category, one was B category and another was C category. Chittagong auction market was selected for this study. (Detaied methodology is shown in Hassan, 1999). Secondary data were collected from various secondary sources. Data concerning processing cost, income etc, were collected for the year 1998. However, marketing data were collected from auction market in 1999.

Source of Information: Bangladesh J. Agric. Econs. XXIII, 1 & 2(2000) 77-90

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Marketing cost was the highest for bidders and the lowest for blenders. Net margin and return on investment was found highest for retailers. Profit from packet tea was greater than that from open tea. Price instability, inadequate storage facilities, strike, lack of market information, scarcity of plywood, shortage of capital, higher amount of charges and barriers created by law are the important problems faced by the tea producers and traders. Tea production increased mainly due to rise in yield and growth rate of former period was much higher than that of latter period. Although nominal price increased but real price remained more or less same during the study period. Nominal price rise in the first period was found higher than that of second period. Marketing margin in the first period remained static whereas it went up significantly in the latter period. Seasonal price and quantity variations were not related and variation in quantity was higher than that of price.

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