Bangladesh tea prices soften on rising supplies

Monday, 21 May 2012 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: Tea prices in Bangladesh eased slightly at the weekly auction last week due to rising supplies but almost all the quantity on offer was sold amid strong demand for good quality new-season varieties, brokers said.

The average price of Bangladeshi tea inched down to 192.75 taka ($2.35) a kg against 193.55 taka per kg at the previous sale, said an official at National Brokers Limited, the country’s largest tea broking firm.

Around 710,000 kg of tea was offered at Bangladesh’s sole auction centre in Chittagong, and just 0.65 per cent was left unsold. That compared with 19 per cent unsold in the previous auction, when the offer was nearly 596,000 kg of tea.

A small drop in prices was due to rising supplies but demand was strong for new-season tea, a senior official at the National Brokers Limited.

There was huge demand for good-quality tea throughout the 2011-12 year, with the average price rising to around 130 taka from 104 taka a year earlier, brokers said.

Tea offered at the Chittagong auction is mostly picked up by domestic buyers.

Bangladesh’s tax authority in January imposed a 25 per cent duty on imports of tea to safeguard the local industry.

The south Asian country produces 60 million kg of tea a year against demand of 56 million kg. But tea consumption is rising by 4.5 per cent annually, in line with steady economic growth and changes in lifestyles.

Industry insiders said around a fourth of Bangladeshi tea is of poor quality and that prices of good-quality tea are high compared with those of other tea-producing countries.