Tea prices in Bangladesh rose for a second straight week on Tuesday on strong demand from buyers at a weekly auction and almost all the quantity on offer was sold, brokers said. The average price of Bangladeshi tea was 202.77 taka ($2.5) a kg against 198.14 taka per kg at the previous sale, an official at National Brokers Limited said, the country's largest tea broking firm.
Around 806,000 kg of tea was offered at Bangladesh's sole auction centre in Chittagong, and just 0.45 percent was left unsold. That compared with 0.35 percent unsold in the previous auction, when the offer was nearly 812,000 kg of tea.
"The market continued to be strong with buyers operating for all varieties at higher rates," the broking firm said in its report. The next auction will be held on June 5, with around 950,000 kg on offer. There was huge demand for good-quality tea throughout the 2011-12 year, with the average price rising to around 130 taka from 104 taka a year earlier, brokers said.
Tea offered at the Chittagong auction is mostly picked up by domestic buyers. Bangladesh's tax authority in January imposed a 25 percent duty on imports of tea to safeguard the local industry. The south Asian country produces 60 million kg of tea a year against demand of 56 million kg. But tea consumption is rising by 4.5 percent annually, in line with steady economic growth and changes in lifestyles. Industry insiders said around a quarter of Bangladeshi tea is of poor quality and that prices of good-quality tea are high compared with those of other tea-producing countries.