Prices of CTC grade tea in India, the world's second biggest tea producer, edged higher at this week's auction on good demand, while prices of dust grade fell on higher supplies. The price of CTC (crush-tear-curl) tea rose 0.7 percent to 147.01 rupees per kg, while the dust variety dropped 2.3 percent to 145.76 rupees per kg. "Local packeters are active in the market. Exports demand was slightly weak," an official at Calcutta Tea Traders' Association said.

"Dust fell due to higher supplies, but it is likely to recover next week. Winter season demand is rising." Tea consumption rises in India during the winter months as people prefer it to cold drinks. Tea plucking in India usually rises between July and October. The country's tea exports in April to September dropped by a fifth from last year to 81.85 million kg, the state-run Tea Board said in a statement earlier this month.

India's tea production in the first nine months of the year fell 1.3 percent year-on-year to 772.5 million kg as dry weather in Assam hampered plucking earlier in the year. The average price of Kenya's top tea grade rose for a fifth straight week at auction to $4.42 per kg from $4.33 at the previous sale, brokers said earlier this week. India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.

Copyright Reuters, 2012