MUMBAI: Tea prices in India, the world's second biggest producer, rose at last week's auction due to thin supplies and as buyers were willing to pay higher price for good quality new-season leaf, dealers and industry officials said on Tuesday.
The price of CTC (crush-tear-curl) tea stood at 128.64 rupees ($2.49) per kg, compared with 102.18 rupees at the previous weekly auction. Dust tea price rose 8.3 percent to 137.43 rupees per kg.
"Around this time of the year, usually supplies remain tight. Arrivals from new season crop have started in small amount. Its quality is good and demand is very strong from retailers," said Kalyan Sundaram, secretary, Calcutta Tea Trader's Association.
Usually, monthly tea output in India remains lower during December to April and starts recovering from May.
India's tea production in January fell 10.5 percent from the year ago to 18.7 million kg, the state-run Tea Board said earlier this month, as unfavourable weather in the top producing north eastern Assam state hampered plucking.
India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.
The country's tea exports in 2011 fell 3.4 percent to 186.7 million kg, while production rose 2.26 percent to a record high of 988.3 million kg.
Indian tea exports to Iran are facing payment hurdles.