India tea prices soften as supply improves

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

Reuters: Tea prices in India, the world’s second biggest producer, eased at last week’s auction on an improvement in supplies, though strong demand limited the downside. The price of CTC (crush-tear-curl) tea was Rs. 161.33 ($3) per kg, compared with Rs. 162.87 at the previous weekly auction. Dust tea price eased 2.4 per cent to Rs. 164.61 per kg.

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A small drop in prices was there due to rising supplies from Assam. But demand is very good. Local tea brands are aggressively buying in the market,” said a member of Calcutta Tea Trader’s Association who declined to be named.

Usually, monthly tea output in India is lower during December to April and starts recovering from May. India’s tea production in March dropped 16 per cent from the year ago to 47.6 million kilograms, the state-run Tea Board said last week, as unfavourable weather in top producing north eastern Assam state hampered plucking.

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

The country’s tea exports in 2011 fell 3.4 per cent to 186.7 million kg, while production rose 2.26 per cent to a record high of 988.3 million kg.