Tea prices in Bangladesh were slightly higher at a weekly auction on Tuesday due to strong demand from local buyers, although a larger volume remained unsold.
Bangladeshi tea fetched an average of 176.73 taka ($2.4) per kg at the auction against 176.09 taka at the previous sales, an official at National Brokers Limited said.
Around 1.58 million kg was offered at the sole auction centre in Chittagong, and nearly 43 percent remained unsold. At the previous auction, nearly 1.5 million kg was offered, of which 29 percent went unsold.
The latest offering was the largest of the season so far, but strong demand from local buyers for quality tea offset higher supplies, the official said.
Bangladeshi buyers have been importing tea in bulk from neighbouring India, contributing to a glut in the domestic market and reducing demand at auctions, industry sources said.
That has prompted authorities to extend the last season through April from the typical close at end-March.
In April, however, the Bangladeshi tax authority trebled regulatory duties to 15 percent on imports of tea to discourage overseas buying as ample local supplies have driven down prices.
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.
That still fell short of domestic consumption of about 65 million kg. Bangladesh has moved from being a net exporter to a net importer of tea as consumption has risen.
Source: in.reuters.com/article/2014/06/17/bangladesh-tea-auction-idINL4N0OY2XE20140617
