Bangladesh tea prices drop on poor-grade leaf

Thursday, 19 January 2017 00:00 - - {{hitsCtrl.values.hits}}

DHAKA (Reuters) - Tea prices in Bangladesh dropped slightly at the weekly auction on Tuesday amid large supplies of inferior-quality leaf, but strong demand for quality leaf capped a steeper decline.

Bangladeshi tea fetched an average of 167.5 taka ($2.13) per kg at the auction, compared with 167.81 taka in the previous sale.

The volume of poor-grade leaf was higher and that contributed to a decline in prices, a senior official at National Brokers said.

There was, however, strong demand for quality tea which helped limit a steep drop in prices, the official added. About 36% of the 2.76 million kg offered at the sole auction centre in Chittagong was unsold. In the previous auction, about 34% of the 2.72 million kg on offer remained unsold.

Bangladesh’s tea production in 2016 is expected to have risen to a record 80 million kg from 66 million kg a year earlier, Commerce Minister Tofail Ahmed said last month, output that may be big enough to make imports unnecessary. From being a net exporter, Bangladesh is now a net importer of tea due to a rise in consumption.