Tea prices in Bangladesh fell for a second straight week at the weekly auction on Wednesday due to higher supplies but strong demand for quality leaf capped the slide and sales rose.
Bangladeshi tea fetched an average of 181.37 taka ($2.34) per kg at the auction, down from 185.70 taka at the previous sale held on Oct. 28, said an executive at National Brokers Ltd.
More than 2.8 million kg was offered at the auction centre in Chittagong, of which 23 per cent went unsold. During the previous auction, about 2.7 million kg was offered, with nearly 28 per cent remaining unsold.
“There was strong demand for quality tea that limited the fall and sales also rose despite a larger volume on offer this week,” the executive said.
On-going strikes also hampered market sentiment, he added. Bangladesh is in a spate of strikes after the Supreme Court on Monday upheld the death penalty for an Islamist leader over atrocities committed during the country’s war of independence in 1971.
Tea production in Bangladesh rose 1.6 per cent in 2013 to a record 63.5 million kg due to favourable weather, but was still short of the domestic consumption of about 65 million kg.
The country has moved from being a net exporter to a net importer of tea due to rising consumption.
In April this year, Bangladesh increased customs duty to 15 per cent from 5 per cent to discourage imports amid a drop in local prices due to ample supplies.
– By Reuters