Tea prices plunge on poor local demand

Tea prices in Bangladesh dropped on Tuesday at the second auction of the new season on weak demand from local buyers despite the arrival of fresh and good quality leaf, brokers said.
Bangladeshi tea fetched an average of 183.82 taka ($2.3) per kg at the auction, down from 194.27 taka at the first auction of the new season, an official at National Brokers Limited said.
teaMajor buyers were back at the market on the arrival of fresh leaf as new season started, although demand were still weak that left huge volume of tea unsold, the official said.
Nearly 943,000 kg was offered at the sole auction centre in Chittagong, and 39 percent remained unsold. At the previous auction on May 14, more than 1 million kg was offered, of which nearly 37 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.
Last month, 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 becoming a net exporter to a net importer of tea as consumption has risen.
– Reuters