MUMBAI: Tea prices in India edged higher at this week’s auction on good demand from local and overseas buyers and on tight supplies due to lower production in the first half of 2012.

The price of CTC (crush-tear-curl) tea rose 1.4 per cent to 145.07 Indian rupees ($2.7) per kg, while the dust variety edged higher 0.16 per cent to 152.22 rupees per kg.

“Supplies were largely steady. Local picketers were active. Exporters were showing interest for good quality tea,” an official at Calcutta Tea Traders’ Association said.

Tea consumption rises in India during the winter months as people prefer it over cold drinks.

The average price of top grade Kenyan tea dipped for the second consecutive week to $4.16 per kg at auction this week from $4.17 per kg last week, traders said on Wednesday.

India’s tea production in the first seven months of the year fell 4.2 per cent year-on-year to 470.7 million kg as dry weather in Assam hampered plucking earlier in the year.  Tea plucking in India, the world’s second-biggest producer, usually rises between July and October.

The country’s 2012 tea output is expected to ease 1.5 per cent to 973 million kg from a record 988.3 million kg in 2011 as drought affected the crop in the first six months of the year.

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