Tea prices in Bangladesh plunged for a sixth straight week at a weekly auction on Tuesday, because of larger supplies of end-of-season inferior quality leaf, brokers said.
Bangladeshi tea fetched an average of 125.85 taka ($1.6) per kg at the auction, sharply down from 144.19 taka in the previous week’s sale, said an official from National Brokers Limited.
More than 2.7 million kg was offered at the auction centre in Chittagong, with nearly 54 percent remaining unsold. At the previous auction, nearly 2.7 million kg was offered, of which 50 percent went unsold.
“There was huge demand for quality tea, which is in short supply. Poor grade tea dragged down prices and more than half of the tea that was offered in the auction went unsold,” the official said.
Bangladeshi buyers have imported tea in bulk from neighbouring India, contributing to a glut in the domestic market and reducing demand at the auction, industry sources said.
The large volume of unsold tea prompted authorities to extend the season by two weeks to April 15, allowing for two more auctions.
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.