India tea prices steady; supply pressure weighs

MUMBAI Aug 19 (Reuters) - Tea prices in India, the world's second biggest producer, were steady at this week's auction as a demand boost during festival offset a rise in supplies, dealers said on Friday.

Price of CTC (crush-tear-curl) tea eased 0.66 percent to 127.41 rupees per kg against 128.26 rupees at the previous weekly auction.

Dust tea gained 0.2 percent to 123.77 rupees per kg from 123.52 rupees at the previous auction.

"Supplies have risen significantly since the beginning of this month. Quality of leaf is good. Domestic buyers are putting large orders," said an official at Calcutta Tea Trader's Association.

India's June tea output rose 10.3 percent to 11.47 million kg, while exports dropped 3.8 percent to 12.27 million kg on year, data with the state-run Tea Board showed.

India is the world's second biggest producer of tea after China. It exports CTC tea mainly to Egypt, Pakistan and the U.K., and the premium orthodox variety to Iraq, Iran and Russia.

Prices in the latest auction (Aug 16-18) --------------------------------------------------------------

Variety Offered quantity Sold quantity Avg Price --------------------------------------------------------------

CTC Leaf 3027873 2353232 127.41

Dust tea 1659790 1317945 123.77

Prices in the last auction (Aug 9-11) ---------------------------------------------------------------

CTC Leaf 2944293 2236028 128.26

Dust tea 1699003 1086345 123.52

Source: Calcutta Tea Traders' Association (Reporting by Rajendra Jadhav; Editing by Rajesh Pandathil)