India Dust Tea Falls on Quality; CTC Steady.

MUMBAI Nov 25 (Reuters) - Dust tea prices in India, the world's second biggest producer of tea, dropped at this week's auction as quality of leaf was slightly lower than last week's, but good demand for CTC kept its prices steady, dealers and industry officials said on Friday.

Price of CTC (crush-tear-curl) tea stood at 124.62 rupees per kg, almost steady compared to 124.54 rupees at the previous weekly auction.

Dust tea dropped 2 percent to 121.29 rupees per kg from 123.7 rupees at the previous auction.

"Demand was good for all grades of tea. Dust was down as quality of produce was slightly lower compared to last week's arrivals," said Kalyan Sundaram, secretary, Calcutta Tea Traders Association.

"Due to winter season, demand from packet tea makers is good."

India is likely to harvest a record crop of more than 1 billion kg in 2011 calendar year, compared to 966 million kg in 2010, a senior industry official said on Sept. 14.

India's tea exports could fall nearly 7 percent in 2011 to 180-185 million kgs partly due to payments problems with Iran and unrest in the Middle East, he said

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

The country's tea exports in September rose 8.8 percent on year to 21 million kilogram, rising for the second straight month, the state-run Tea Board said on Thursday, as demand improved from the Middle East.

Prices in the latest auction (Nov 22-24)

(Quantity in kg; price in rupees per kg)

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Variety Offered quantity Sold quantity Avg Price

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CTC Leaf 2999922 2314009 124.62

Dust tea 1469974 1194048 121.29

Prices in the last auction (Nov 15-17)

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CTC Leaf 3202603 2655402 124.54

Dust tea 1464414 1186182 123.70

Source : af.reuters.com