January 29, 2013 / 3:32 AM / 5 years ago

Indian tea prices rise on thin supplies, winter demand

MUMBAI, Jan 29 (Reuters) - Tea prices in India, the world’s second-biggest producer, rose at last week’s auction on a drop in supplies and as local packeters raised purchases to cater to the winter demand.

The CTC (crush-tear-curl) grade was offered at 138.76 rupees per kg, up 1.5 percent from the previous week’s auction, while the dust variety rose 1.84 percent to 141.92 rupees per kg.

“Supplies fell sharply at last week’s auction. Demand was good from local buyers. Exporters were not active as good quality produce is not arriving,” said a member of Calcutta Tea Traders’ Association.

Tea consumption rises in India during the winter months as people prefer it to cold drinks. Tea plucking in India usually picks up between July and October.

India’s tea production in October fell 4.1 percent from a year ago to 129.68 million kg, the state-run Tea Board said, as adverse weather cut production in the top producing north-eastern Assam state.

India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.

Six major tea-growing nations have formed an international organisation to promote and develop the commodity and ensure its production is sustainable.

Prices at the latest auction (Jan. 22 & 24)

(Quantity in kg; price in rupees per kg) ------------------------------------------------------------- Variety Offered quantity Sold quantity Average Price -------------------------------------------------------------- CTC Leaf 2,355,486 1,990,097 138.76 Dust tea 949,096 829,337 141.92

Prices in the previous auction (Jan. 15-17) --------------------------------------------------------------- CTC Leaf 3,185,563 2,493,407 136.72 Dust tea 1,206,807 1,046,517 139.36 Source: Calcutta Tea Traders’ Association (Reporting by Rajendra Jadhav; Editing by Jijo Jacob)

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