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Friday Nov 15, 2024
Wednesday, 10 August 2011 01:00 - - {{hitsCtrl.values.hits}}
Reuters: Buyers returned to the weekly tea auction in Bangladesh on Tuesday, ending two weeks of boycott after the Government temporarily suspended a new tax, brokers said.
More than three million kg of tea remained unsold due to the stalemate over the five per cent new tax that kept buyers away from two auctions in Chittagong port city, the first of its kind, prompting some buyers to import tea.
The Government has suspended the new tax for one month after a meeting on Sunday between Finance Minister Abul Maal Abdul Muhith and stakeholders including tea growers, buyers and brokers.
“Buyers ended their boycott after the finance minister instructed the tax authority to work out an acceptable solution within a month,” said M. Saiful Islam, Managing Director at National Brokers Ltd., the largest tea broking firm in the country.
“Meanwhile, the buyers don’t need to pay the new tax,” he said.
The new tax is in addition to a 17 per cent tax the buyers are paying already.
“Today’s market looks strong with large participation of buyers,” said another official at National Brokers.
The average price of Bangladeshi tea edged slightly higher to 161.46 taka ($2.1) a kg at the last auction held on 19 July after falling continuously over the previous four weeks.
A total of 56.92 million kg of tea was sold at the auction in 2010, up from 54.25 million kg the previous year.
Tea exports fell to $3.20 million in the fiscal year that ended in June from $5.65 million the previous year, mainly due to growing domestic demand.
The country has become a net importer of tea after previously ranking as the world’s fifth-largest exporter.
Tea’s share of exports is now tiny compared with top export earner readymade garments that fetched nearly $18 billion in the last fiscal year while total exports hit a record $22.92 billion.
Pakistan, the United Arab Emirates and Saudi Arabia are the main importers of Bangladeshi teas.
