Bangladesh tea prices drop for 2nd week on quality concerns
Michael Chen
Senior Web Developer
Tea prices in Bangladesh fell for the second session at a weekly auction on Tuesday after rising more than 15 percent in the previous five sessions, as demand weakened on poor quality.
The average price of Bangladeshi tea was 204.58 taka ($2.6) a kg against 212.86 taka per kg at the previous sale a week ago, said an official at National Brokers Limited, the country's largest tea broking firm.
More than 1.53 million kg of tea was offered at Bangladesh's sole auction centre in Chittagong, and 14 percent was left unsold.
That compared with 7.51 percent unsold in the previous auction, when the offered volumes were nearly 1.5 million kg.
The next auction will be held on July 10, with around 1 million kg on offer.
Industry insiders said around a quarter of Bangladeshi tea is of poor quality and that prices of good-quality tea are high compared with those of other tea-producing countries.
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 percent 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 percent annually, in line with steady economic growth and changes in lifestyles.
Source: reuters.com/article/2012/07/04/bangladesh-tea-auction-idINL3E8I32M120120704
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