Tea prices up on thin supplies amid unrest

Tea prices in Bangladesh rose at a weekly auction on Tuesday, ending two weeks of falls, due to a drop in volumes as renewed political unrest disrupted supplies, reports Reuters.

Bangladesh has been racked by political violence since anti-government protests turned violent on Jan. 5, the first anniversary of a disputed election.

At least 38 people have died and scores have been injured, most of them in firebomb attacks, amid a violent nationwide transport blockade by the main opposition party.

Tea volumes are down this week as political violence and transport blockades have disrupted supplies, an executive with National Brokers Ltd said.

Typically, demand for tea rises in Bangladesh during the winter season.

Bangladeshi tea fetched an average 190.61 taka ($2.40) per kg, compared with 185.27 taka at the previous sale, he said.

About 1.76 million kg was offered at the sole auction centre in Chittagong, of which 24 per cent remained unsold. In the previous auction, about 1.9 million kg was offered, with nearly 32 per cent remaining unsold.

Tea production in Bangladesh rose 1.6 per cent in 2013 to a record 63.5 million kg due to favourable weather but was still short of the domestic consumption of about 65 million kg.

The country has moved from being a net exporter to a net importer of tea because of rising consumption.

In April 2014, Bangladesh increased customs duty to 15 per cent from 5 per cent to discourage imports amid a drop in local prices due to ample supplies.