India tea prices drop as supplies of poor grade rise

Tuesday, 22 January 2013 00:00 - - {{hitsCtrl.values.hits}}

MUMBAI (Reuters): Tea prices in India, the world's second-biggest producer, dropped at last week's auction as supplies of premier quality leaf fell, though winter season demand limited the downside.

The CTC (crush-tear-curl) grade was offered at 136.72 rupees per kg, down 3.5%, while the dust variety fell 2.5% to 139.36 rupees per kg.

"Average price is down as share of good quality supplies is going down. During this time of the year unusually supplies of poor grade tea rises," said a member of Calcutta Tea Traders' Association.

India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.

Tea consumption rises in India during the winter months as people prefer it to cold drinks. Tea plucking in India usually picks up between July and October.

The average price of Kenya's top tea grade inched up to $4.31 per kg from $4.29 per kg at the auction last week, traders said on Tuesday.

India's tea production in October fell 4.1% from a year ago to 129.68 million kg, the state-run Tea Board said, as adverse weather cut production in the top producing north-eastern Assam state.