Tea prices in Bangladesh rose at a weekly auction on Tuesday as higher supplies were offset by strong demand from local buyers, brokers said.
Bangladeshi tea fetched an average of 176.09 taka ($2.3) per kg at the auction against 174.76 taka at the previous sales, an official at National Brokers Limited said.
Major buyers were back at the market on arrival of fresh leaf as the new season started on May 14, the official said.
Around 1.5 million kg was offered at the sole auction centre in Chittagong, and nearly 29 percent remained unsold. At the previous auction, nearly 1.3 million kg was offered, of which 29 percent went unsold.
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 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.