Tea prices in Bangladesh fell at the weekly auction on Tuesday, snapping a three-week run of gains due to higher volume of poor grades on offer, but strong demand for quality leaf capped the slide. Bangladeshi tea fetched an average 193.38 taka ($2.44) per kg at the 35th auction of this marketing season, slightly down from 193.87 taka in the previous sale, a National Brokers executive said.
About 1.81 million kg were offered at the sole auction centre in the port city of Chittagong, of which 23 percent went unsold. In the previous auction, about 24 percent of the 2.02 million kg offered was unsold. Supplies were lower than last week and that included a higher percentage of low grade leaf, the executive said, adding that strong demand for quality tea limited the fall.
Typically demand for tea rises in Bangladesh during the winter. The national budget for the 2015/16 fiscal year, which began in July, raised the regulatory duty on tea imports by 5 percent to discourage overseas buying. Tea prices fell sharply in the last marketing season due to weak demand from local buyers, as business sentiment was hit by renewed political unrest early this year that left more than 120 people dead and disrupted supplies. The country has moved from being a net exporter to a net importer of tea due to rising consumption.
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