Bangladesh imposes duty on tea imports

Wednesday, 11 January 2012 01:29 - - {{hitsCtrl.values.hits}}

DHAKA (Reuters): Bangladesh’s Tax Authority has imposed a 25 per cent duty on imports of tea to safeguard local industry, a senior tax official said on Tuesday.

“The new measure to impose a regulatory duty was taken as increased imports have been affecting local growers,” the official said, adding that previously there was no such duty on tea imports.

The country has become a net importer of tea after previously ranking as the world’s fifth-largest exporter in 1990s.

Bangladeshi buyers import tea from India, Kenya and Vietnam due to competitive pricing.

Tea exports fell to $ 3.20 million in the fiscal year ended in June 2011 from $ 5.65 million the previous year, mainly due to growing domestic demand.

Bangladesh produces 60 million kg of tea a year against demand of 56 million kg. But tea consumption is rising by 4.5 per cent annually, in line with steady economic growth and changes in lifestyles.

Industry insiders said around a fourth of Bangladeshi tea is of poor quality and that prices of good tea are higher compared with those of other tea-producing countries.

Tea is sold at the country’s sole auction centre, in the main port city Chittagong, where most of it is picked up by domestic buyers.