India Tea Prices Drop on Higher Supply from Assam.

MUMBAI Oct 21 (Reuters) - Tea prices in India, the world's second biggest producer of tea, dropped at this week's auction as supplies rose due to higher production, dealers and industry officials said on Friday.

Price of CTC (crush-tear-curl) tea stood at 126.7 rupees per kg, down 1.41 percent compared to 128.51 rupees at the previous weekly auction.

Dust tea plunged 3.44 percent to 122.52 rupees per kg from 126.89 rupees at the previous auction.

"Supplies have jumped at this week's auction. Production in Assam is far better than last year," said an official at Calcutta Tea Traders Association.

"Demand is good in the domestic market due to upcoming winter season."

India is likely to harvest a record crop of more than 1,000 million kg in 2011 calendar year, compared to 966 million kg in 2010, a senior industry official said on Sept. 14.

Exports by India 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 production in August edged up by 3.5 percent on year to 127 million kilograms. The production in the first eight months rose by 5.8 percent on year to 618.6 million kilograms.

Source : af.reuters.com