Tea prices up on robust demand

Risingbd Desk: Tea prices in Bangladesh extended gains at the weekly auction on Tuesday due to robust demand from local buyers for quality leaf, despite larger supplies and sales volume also rose.

Bangladeshi tea fetched an average of 190.35 taka ($2.4) per kg at the auction against 187.52 taka at the previous sale, an official at National Brokers Ltd said.

Around 1.78 million kg was offered at the sole auction centre in Chittagong, with 28 percent remaining unsold. At the previous auction, nearly 1.5 million kg was offered, of which 37 percent went unsold.

"Demand was strong for quality tea and buyers were ready to pay a premium," the official said.

Bangladeshi buyers have imported tea in bulk from neighbouring India, contributing to a glut in the domestic market and reducing demand at auctions, industry sources said.

That prompted authorities to extend the duration of last season through April from the typical close at end-March.

In April, however, the Bangladeshi tax authority trebled regulatory duty to 15 percent on imports of tea to discourage overseas buying amid a drop in local prices due to ample supplies.

Bangladesh`s tea production in 2013 rose 1.6 percent from a year earlier to a record 63.5 million kg due to favourable weather but still fell short of the domestic consumption of about 65 million kg.

Bangladesh has moved from being a net exporter of tea to a net importer due to rising consumption.

Reuters

risingbd/July 15, 2014/Augustin Sujan