Tea prices in Bangladesh rose 2.42 percent at a weekly auction on Wednesday, after rising 5.2 percent at the previous session, due to strong demand, brokers said. The average price of Bangladesh tea rose to 234.93 taka ($2.91) a kg against 229.37 taka per kg the previous week, an official at the country's largest tea broking firm, National Brokers Limited, said.

More than 1.8 million kg of tea were offered at Bangladesh's sole auction centre in Chittagong, with 7.77 percent unsold, compared with 3.30 percent unsold in the previous auction when 1.7 million kg was offered. "There was only a little interest from the loose tea buyers." Around 2.43 million kg will be offered at the next auction on December 18.

Tea sold at the Chittagong auction is mostly bought by domestic buyers. Bangladesh's tax authority in January imposed a 25 percent duty on imports of tea to safeguard the local industry. The south Asian country produces 60 million kg of tea a year against demand of 56 million kg. But tea consumption is rising by 4.5 percent annually, in line with steady economic growth.

Copyright Reuters, 2012