Tea prices dip amid political unrest

Tea prices in Bangladesh declined for a third straight week at a weekly auction on Tuesday due to tepid local demand amid political unrest that disrupted supplies.

Bangladesh has been racked by political violence since anti-government protests turned violent last month over a disputed election a year ago.

More than 80 people have died and hundreds have been injured, most of them in firebomb attacks on vehicles, amid a violent nationwide transport blockade by the main opposition party aimed at toppling the government.

Demand from local buyers was sluggish as political violence and uncertainties hurt business sentiment while volumes rose slightly despite non-stop transport blockades disrupting supplies, an executive with National Brokers Ltd said.

Bangladeshi tea fetched an average Tk 185.94 ($2.40) per kg, compared with Tk 187.28 at the previous sale, he said.

About 1.75 million kg was offered at the sole auction centre in Chittagong, of which 38 percent remained unsold. In the previous auction, about 1.7 million kg was offered, with nearly 37 percent remaining unsold.

Tea production in Bangladesh rose 1.6 percent 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 percent from 5 percent to discourage imports amid a drop in local prices due to ample supplies.