Tea prices drop on higher supply, subdued demand

MUMBAI: Tea prices in India, the world's second-biggest producer, fell at this week's auction on higher supplies amid weak demand from local buyers, although concerns over production in top producer Assam state limited the downside.

The CTC (crush-tear-curl) grade was sold at Rs 142.45 per kg, down 1.34 per cent from the previous week's auction, while prices of the dust variety fell 3.82 per cent to Rs 149.79 per kg.

"HUL ( Hindustan Unilever Ltd) was very selective, while demand from Tata Global Beverages was subdued. Supplies were higher than the previous auction," said an official of the Calcutta Tea Traders' Association.

"The weather is not favourable for the crop in Assam and there are concerns of lower production in June. That capped the downside. Some tea garden owners decided not to sell at lower level."

The country's tea production from April 2012 to March 2013 rose 2 per cent from a year earlier to a record high of 1,116.67 million kg, the state-run Tea Board said.

The average price of Kenya's top-grade Broken Pekoe Ones tea dipped to $3.16 per kg at this week's auction from $3.21 per kg at last week's sale.