MUMBAI: Tea prices in India, the world’s second biggest producer, moved higher at this week’s auction as demand from local and overseas buyers improved, dealers and industry officials said on Friday.

The price of CTC (crush-tear-curl) tea rose 1 per cent to 150.43 rupees ($2.71) per kg, while dust tea price climbed 1.2 per cent to 153.03 rupees per kg.

“In almost all leading tea producing countries tea prices are moving higher due to lower output. It is giving boost to Indian prices as well,” said an official at Calcutta Tea Trader’s Association.

The average price of Kenyan top grade tea inched up to $4.08 per kg at auction this week from $4.03 kg last week, traders said on Wednesday.

The country’s tea production in the first six months of 2012 fell 5.7 per cent on year to 338 million kg as unfavourable weather in the top-producing north eastern state of Assam hampered plucking earlier this year.

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