Tea prices in Bangladesh fell nearly 11% at an auction on Tuesday as the volumes offered were the highest for the season so far and included a higher percentage of low-grade leaf, brokers said.
At the latest auction, Bangladeshi tea fetched an average of 160.26 taka ($2.06) per kg against 180.03 taka in the previous week’s auction, when prices fell 2%, an official from National Brokers Limited said.
More than 3.33 million kg of tea was offered at the auction centre in Chittagong, with almost 63% remaining unsold.
At the previous auction, nearly 2.92 million kg of tea had been offered, of which 51.80% went unsold.
The latest offering was the largest of the season so far, while supplies of end-of-season poor-grade tea also were on the rise, the official said.
“Poor quality season-end supplies pulled down both prices and sales volume sharply.”
The auction next Tuesday will offer even larger supplies than this week as unsold quantities will be added to fresh supplies, he added.
Bangladeshi buyers also have imported bulk quantity of tea from neighbouring India, which contributed to a glut in the domestic market and reduced demand for tea at the auction, industry sources said.
Bangladesh’s tea production in 2013 rose 1.6% from a year earlier to a record 63.5 million kg, due to favourable weather.
That was still less than the 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.
