Bangladesh tea prices snap 2-week gaining streak

DHAKA (Reuters): Tea prices in Bangladesh fell at the weekly auction, snapping a two-week run of gains, but strong demand for quality leaf prevented a steeper decline and the proportion of tea sold rose despite a higher volume on offer.

Bangladeshi tea fetched an average price of 235.78 taka ($2.80) per kg at the auction held on Tuesday, compared with a revised price of 238.23 taka at the previous sale, National Brokers said.

There was muted demand from buyers, but strong demand for quality leaf helped limit the drop in prices, a senior official with National Brokers said.

The proportion of tea sold also rose despite higher supplies than last week, he added.

About 17.6% of the 2.33 million kg offered at the sole auction centre in Chittagong was unsold, compared with 19% unsold of the 2.27 million kg offered in 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.