Tea Board launches e-auction to bring uniformity in rules

Earlier, the rule stated that a buyer registered with a particular auction centre has to buy tea from that same centre only

In a bid to widen the geographical scope of buyers, the Tea Board of India has initiated pan-India e-auctions whereby a buyer registered with any one of the seven auction centres can participate in tea auctions across these centres. Earlier, a buyer registered with a particular auction centre could buy tea only from that centre.

“This will facilitate simplified and straight-forward auction process. Going ahead, we'll be improving this system and the auction platform," said Union commerce secretary Rita Teaotia here on Tuesday. She said the process would help the sellers tap more markets.

“The first such auction will be held in three or four weeks from now. First, the southern auction centres will start it and northern auction centres will hold the pan-India e-auction”, said Tea Board chairman Santosh Sarangi.

The prized and much sought-after Darjeeling tea, which has for long sold in only manual auctions, will also feature in the national level e-auction. According to the Tea Board, the e-auction ran into 10 major problems bringing stagnancy into the system. The prevalence of different auction rules across the centres made the process complicated for the buyers, which was fueled by the presence of proxy bidding systems, longer credit period and the provision to cancel the order, among other problems.

These, in turn, led to lesser sellers and buyers participating in e-auctions.

“Under the new auction system, the rules have been made uniform and credit period has been reduced," said Sarangi, adding the credit period might be revised again later. At present, a credit period under the prevalent scheme is 13-26 days, which will be brought down to 13 days.

UPDATING AUCTION

• First manual tea auction in India took place in 1861 in Kolkata
• Manual tea auction continued for over 150 years. First e-auction held in 2009 across seven auction centres in Kolkata, Siliguri, Guwahati, Jalpaiguri, Coonoor, Cochin and Coimbatore
• Off the total tea sold, on an avergae 40-45 per cent is through the e-auction route
• With the new pan-India e-auction, buyers from any part of India can bid in any auction of any centre

Benefits of pan-India e-auction

• Fetching better prices to sellers/growers
• Participation of buyers in all auction centres with single registration
• Uniform auction rules across all auction centres
• Ensuring generation of delivery orders from the system only after actual realisation of payments
• Introduction of electronic auction of Darjeeling tea
• More volume of tea can be offered in the auction platform with speedy sale

Source: Tea Board of India

Furthermore, once the pan-India e-auction kicks off, a buyer will not be able to cancel his order if the bid is accepted. A senior Tea Board official said it was expecting around 540 million kg of tea to be auctioned under the new process.

However, local and region-based auctions will continue.

The Tea Board of India launched e-auctions in 2009 in the Kolkata, Siliguri, Guwahati, Jalpaiguri, Coonoor, Kochi and Coimbatore auction centres.

Asked about the central government's views about the situation of tea gardens in West Bengal in the wake of alleged tea pluckers' death owing to malnutrition in closed tea gardens, Teaotia said: “I do not think there is any reason for an alarm. There are plantations which are under stress but others are doing well. Our aim is to help the industry perform better.