Dhaka (Reuters): Tea prices fell at Bangladesh’s weekly auction amid higher supply than at the previous sale, although strong demand for quality leaf capped a steeper price decline.
Bangladeshi tea fetched an average price of 229.62 taka ($ 2.80) per kg at the auction, compared with a revised price of 234.98 taka in the previous sale, National Brokers said.
There was muted demand overall but good demand for quality leaf, which helped limit a steep drop in prices when supplies were higher than last week, a senior official at National Brokers said.
About 39.5% of the 2.5 million kg offered at the sole auction centre in Chittagong was unsold, compared with 32.4% unsold of the 2.29 million kg offered at the previous auction.
Bangladesh’s tea production jumped nearly 27% in 2016 to a record 85 million kg, helped by favourable weather, making imports a choice, not a necessity.
The South Asian country was the world’s fifth-largest tea exporter in the 1990s but is now a net importer due to a surge in domestic consumption in line with economic growth.