Critical Analysis of Tea Industry in Bangladesh from Managerial Economic Perspective

Topics: Supply and demand, Tea, Black tea Pages: 45 (12999 words) Published: May 15, 2012
1. Introduction

This project proposal titled “Critical Analysis of Tea Industry in Bangladesh from Managerial Economic Perspective” has been proposed for Dr. A. K. M. Saiful Majid, Course Instructor, Managerial Economics, as a partial requirement of the course. 1.1. Scope

We have used this study to find out present situation of the tea market which includes the demand supply equilibrium, demand supply scenario, market structure, problems and potentialities of the distribution channel. Furthermore this study analyzed the government policies regarding the tea industry of the country along with trade policies, annual budget provision of the market and price controlling of the government etc. 1.2. Background

Tea is a major cash crop of Bangladesh, as well as one of the most popular drinks. It is also one of the major exportable commodities of the country. In the form of employment generation, earning foreign exchange and balancing trade deficit it plays an important role

Figure: Major tea producing regions in Bangladesh
in the economy. The industry employs about 1,50,000 ethnic people (with about 5,00,000 dependents) living in far flung areas of the country. A total of 163 tea gardens produce approximately 60 million kilograms of tea annually (Bangladesh tea Board). Roughly about 25% all tea produced in the country are exported annually to countries like Pakistan, UAE, Kazakhstan, Uzbekistan, India, Poland, Russia, Iran, and UK, while the rest are sold in the local market. The total export earning is around 20 million US dollars. While the share of total foreign currency earning from tea has dropped substantially in recent years, the demand for tea in the local market has gone up significantly in the same time period. In last 10 years demand of tea had been increased quite sharply in local market taking the tea consumption to 48 million kg per year. 1.3. Limitations

While analyzing the tea market of Bangladesh, some limitations have arisen. To do an analysis of Bangladeshi Tea industry the entire Tea export procedures, auctions, history and current situation of Bangladesh Tea, Its production, major competitors, Tea consumptions, World Tea Export must be analyzed. Because of time constraint we may have to focus on the data readily available from Bangladesh Tea Board. Expected limitations may arise due to unavailability of information or lower sample size during surveys. Due to the limited time frame, a comprehensive study that analyzes all economic factors comprehensively has not been possible.

1. Objectives

2.4. Broad Objective
To analyze the current state of tea industry in Bangladesh
To relate different managerial economic theories with real life scenarios.
2.2 Specific Objectives
1. To know about the demand-supply condition of Tea in Bangladesh. 2. To learn about the production factors associated with tea production. 3. To relate different economic theories (Elasticity, Game theory, etc) to the Bangladeshi tea industry. 4. To analyze the government policies to govern tea industry (including taxes and incentive plans)

2. Literature Review

Literature Review

In the international code of botanical nomenclature the name for tea plant is Camellia Sinesis O.Kuntz. The generic name Camelia is derived from Camel or Camellus. Tea is made from the young leaves and unbroken leaf buds of tea plants. After plucking the leaves these are dried up, broken and processed and then brewed up. Liquor of this brewed leaves is taken as drink. Tea has been cultivated from many centuries. Tea breaks down into three basic types; Black, Green and Oolong. More than 90% of tea produced in Bangladesh is Black tea which has been fully fermented and yields a hearty flavored, amber brew. Some of the popular Black teas include English Breakfast, Darjeeling and Orange Peoke....

References: 1. Principles of Microeconomics by Gregory Mankiw (4th ed.2006)

[29th July, 1977]

(7) [Omitted by section 2 of the Tea (Amendment) Ordinance, 1986 (Ordinance No. XV of 1986).]
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