Tea is fetching higher prices at weekly auctions this year, with market players saying the imposition of a minimum price threshold and low supply of the cash crop are key factors for the rise.

However, tea growers are still unsatisfied as they claim the prices do not even cover their costs of production.

The Bangladesh Tea Board (BTB) imposed floor prices on a trial basis for the current season as prices of tea had fallen drastically last year although the country produced a record amount of the evergreen shrub.

The average auction price dropped to a 12-year low of around Tk 171 per kilogramme (kg) last year, when 102.92 million kgs were harvested, according to data from the Chattogram Tea Auction Centre, where 98 percent of overall tea sales are logged.

A total of 29 weekly auctions have been held so far in the current season, which began with the first auction on April 29.

This year, the average price per kg of tea was roughly Tk 268 during the first auction of the season compared to Tk 249 last year.

Similarly, over the past 28 weekly auctions, the average price for tea leaves increased by 8.32 percent year-on-year.

Meanwhile, so far this season, the average price of tea stands at about Tk 214 per kg whereas it stood at Tk 197.46 after as many auctions last season.

Usually, prices begin to fall later in the season, but although prices have been trending downwards over the past few weeks, they are yet to fall below Tk 200 per kg like last season.

Shah Moinuddin Hasan, chairman of the Tea Traders Association of Bangladesh (TTAB), said tea leaves collected early in the season are of higher quality and fetch good prices.

On the other hand, the quality of tea leaves decreases as the months go on, so harvests near the end of the season garner lower prices, he added.

Hasan also said the minimum price threshold introduced by the Bangladesh Tea Board at the start of this season helped slightly increase prices.

Tea leaves are graded into six categories, with the minimum price being set at Tk 160 per kg and the highest quality tea fetching Tk 300.

The prices may also have been influenced by the fact that tea production dropped this year as sporadic rain coupled with flooding across the northern districts hampered plant growth during the budding phase.

Yet, tea growers remain dissatisfied with prices.

"Despite floor prices and low supplies boosting auction prices, it remains inadequate considering production costs," said Kamran Tanvirur Rahman, chairman of the Bangladesh Tea Association.

Mentioning that production costs have surged due to higher input costs, he said it is difficult to make a profit given such prices.

Rahman warned that tea growers may face a bleak future if prices do not rise and they continue to make losses.

TTAB Chairman Hasan said good quality tea sent from gardens in Sylhet and Chattogram fetched good prices in auctions and boosted average prices.

However, the quality of tea provided by small growers in Panchagarh was not that good and therefore mostly went unsold. When they were sold, they fetched low prices.

Sylhet's Moulvibazar district is the biggest hub of tea growers in the country, responsible for around 55 percent of domestic production.