$600m tea import bill exposes neglected commercialisation

Pakistan imports over $600 million worth of tea every year, excluding an equal quantity smuggled under the garb of Afghan Transit Trade, and now ranks among the top tea importing and consuming countries.

The Food and Agriculture Organisation (FAO) reported that tea consumption in Pakistan increased significantly by 35.8% from 2007 to 2016. Tea has become a major import commodity, draining the country's foreign exchange reserves each year.

Tea plantation and processing have already been successfully demonstrated at the National Tea and High Value Research Institute (NTHRI) and the Unilever Tea Research Station in Shinkiari, Mansehra, Khyber-Pakhtunkhwa (K-P). However, commercialisation of tea under a market mechanism has remained pending since 1985 due to a lack of institutional commitment.

Tea drinking began in China in the 6th century AD, spread to Japan in 1000 AD, and reached Western Europe by the 17th century. The British introduced tea cultivation in the Indo-Pak subcontinent in the mid-18th century.

The Pakistan Tea Board (PTB), then based in East Pakistan, began tea plantation at Baffa in Mansehra in 1958. After the separation of East Pakistan as Bangladesh in 1971, PTB experts returned to the East. PARC took over the remaining germplasm and expanded nurseries, establishing a 50-acre tea experimentation station at Shinkiari with support from Chinese tea experts.

Pakistani and Chinese tea experts tested 64 sites in Mansehra and identified around 64,000 hectares of land suitable for tea plantation. Millions of hectares of similar terrain exist in Hazara, Swat, and Dir. Commercialising tea is highly sustainable, with successful models already operating at NTHRI and in private gardens in Mansehra.

Domestic tea production could save over $600 million annually, plus similar losses due to smuggling. It could also provide employment in plantation, processing, and trade. Moreover, tea cultivation could help prevent soil erosion and enhance tourism through scenic landscapes.

The key obstacle to commercialisation is the lack of 100-acre contiguous land plots, water availability, technical expertise, tea processing technology, and high capital investment. Another challenge is the five-year waiting period before tea leaves are ready for processing and sale.

Although NTHRI has demonstrated successful green and black tea production, the absence of investors, land, and liquidity has stalled commercial progress for over four decades.

Unilever Pakistan, formerly Lever Brothers, began commercialising tea alongside NTHRI in the 1980s using various government incentives such as reduced import duties and interest-free loans from Zarai Taraqiati Bank Limited (ZTBL) and Khyber Bank. However, the company proved unserious, primarily using the tax benefits without genuine efforts towards commercialisation.

After selling its tea brand to Lipton, Unilever abruptly shut its research station in Mansehra, laid off staff, and ended operations. Staff protests and appeals to local administration have been ineffective.

The company also planted tea on over 50 acres of farmers' land across Mansehra and Abbottabad. These farmers are now left without buyers for their tea leaves. Despite raising the issue with the DC Mansehra, local officials are helpless. This requires the Ministry of Commerce to step in and compel private companies to follow through on investment commitments.

If no measures are taken, Pakistan may miss yet another opportunity to commercialise its domestic tea production. The government must bind companies to a five-year exit strategy, engage local tea companies, offer buy-back guarantees, and lease the Unilever station to support 50-plus tea growers. A local company has already approached the DC Mansehra and Commissioner Hazara with a proposal, but no response has followed.

If Unilever exits by July 2025 without a plan, Pakistan's tea growers will be abandoned again. The federal government must act now and revive Pakistan's long-stalled tea sector.

THE WRITER HOLDS A PHD IN FORESTRY AND IS A CLIMATE CHANGE, FORESTRY AND ENVIRONMENT EXPERT