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Bangladesh tea prices fall amid supply glut

DHAKA, Dec 13 (Reuters) - Tea prices fell at Bangladesh's weekly auction amid a higher supply than the previous sale, although strong demand for quality leaf capped a steeper price decline. Bangladeshi tea fetched an average price of 236.68 taka ($2.80) per kg at the auction held on Tuesday, compared with a revised price of 238.47 taka at the previous sale, National Brokers said. There was muted demand overall but good demand for quality leaf, which helped limit a steep drop in prices when supplies were higher than last week, a senior official at National Brokers said. Demand for tea in Bangladesh usually rises in winter. Around 21 percent of the 2.75 million kg offered at the sole auction center in Chittagong remained unsold. In the previous auction, 14 percent of the 2.59 million kg on offer was unsold. Bangladesh's tea production jumped nearly 27 percent last year to a record 85 million kg, helped by favorable weather conditions and making imports a choice not a necessity.

The South Asian country was the world's fifth-largest tea exporter in the 1990s but is now a net importer due to a surge in domestic consumption in line with economic growth.

Following are the results of the latest auction (figures in Bangladesh taka per kg):

BROKENS

Bold/Large Brokens 225-230 Medium Brokens 230-236 Small Brokens 233-238 Plain Brokens 165-180

FANNINGS

Best Fannings 245-252 Good Fannings 237-240 Medium Fannings 230-235 Plain Fannings 165-180

DUST

Pekoe Dust not quoted Red Dust 205-275 Dust 174-287 Churamoni Dust 174-272

(Reporting by Ruma Paul; Editing by Susan Fenton)