Bangladesh tea prices rally for second week

DHAKA: Tea prices in Bangladesh rose for the second straight weekly auction on Tuesday, amid concerns that bad weather could hit production in key producing countries.

Bangladesh tea fetched an average of 210.62 taka ($2.61) per kg, compared with 204.41 taka in the previous sale, the National Brokers said.

Dry weather curbed tea production in key suppliers such as Kenya and India, while recent flooding in key exporter Sri Lanka could disrupt shipments from the island nation.

There was robust demand for tea and buyers were ready to pay premiums, which helped prices to rally despite higher supplies than the previous week, a senior official of the National Brokers said.

About 28 percent of the 1.75 million kg offered at the sole auction centre in Chittagong remained unsold. In the previous auction, 23 percent of the 1.41 million kg on offer were unsold.

Bangladesh's tea output in 2016 rose by nearly 27 percent from a year earlier to a record 85 million kg, a harvest that may be big enough to make imports unnecessary.

The south Asian country was the world's fifth-largest tea exporter in the 1990s, but has now become a net importer due to a surge in domestic consumption.

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