Tea prices in Bangladesh fell at the weekly auction, snapping a two-week run of gains, but strong demand for quality leaf prevented a steeper decline and the proportion of tea sold rose despite a higher volume on offer. Bangladeshi tea fetched an average price of 235.78 taka ($2.80) per kg at the auction held on Tuesday, compared with a revised price of 238.23 taka at the previous sale, National Brokers said.
There was muted demand from buyers, but strong demand for quality leaf helped limit the drop in prices, a senior official with National Brokers said. The proportion of tea sold also rose despite higher supplies than last week, he added. About 17.6 percent of the 2.33 million kg offered at the sole auction centre in Chittagong was unsold, compared with 19 percent unsold of the 2.27 million kg offered in the previous auction.
Bangladesh's tea production jumped nearly 27 percent in 2016 to a record 85 million kg, helped by favourable weather, making imports a choice not a necessity. The South Asian country was the world's fifth-largest tea exporter in the 1990s but is now a net importer due to a surge in domestic consumption in line with economic growth.