India tea prices extend losses on weak demand

MUMBAI (Reuters): Tea prices continued their losing streak at last week’s auction in India, the world’s second biggest producer, as buyers offered lower prices for the poor quality produce, dealers said.

“This week offered quantity was on higher side, but domestic companies were buying conservatively,” said an official at Calcutta Tea Traders’ Association.

A pest attack of helopeltis adversely affected tea gardens in the northeastern state of Assam, India’s top producer.

India’s tea production in November 2010 rose 3.7 per cent from a year ago to 93.92 million kgs, while exports fell by 25.6 per cent from a year ago to 15.4 million kg, data with the State-run Tea Board showed.

The average price of CTC (crush-tear-curl) tea fell by 1.4 per cent to 115.1 rupees per kg, compared with 116.74 rupees at the previous auction. The average price of dust tea eased by 0.68 per cent to 107.66 rupees per kg compared with 108.4 rupees in the last auction.