After a year long wait, the Tea Board of India (TBI) has finally rolled out its fully computerised, redesigned electronic auction system in Kolkata, in a bid to create a national web-based integrated platform for tea auction by the end of September 2009.
The web-based auction would be extended to all six centres, making e-auction the only mode of tea auction in India by December.
Speaking at the launch of the e-auction system in Kolkata on Wednesday, Jairam Ramesh, Union minister of state for commerce and industries said, “The newly designed e-auction system, though delayed by almost a year due to financial procedures of the central government would help in increasing the population of buyers as well as sellers besides ensuring an element of transparency in the whole auctioning process."
"It would also integrate the fragmented auctioning system in the country into one national web-based platform, which would in turn ensure better and fair price discovery for all the stakeholders and boost the industry on the whole, ” he added.
He also said, “At present almost 52 percent of total tea production which is close to 500 million kilograms (kgs) of tea in India gets marketed through the traditional auction route and many high quality tea like Assam orthodox and Darjeeling tea are marketed only through private sales. We want this 500 million kgs to migrate seamlessly to e-auction route and bring in at least 5-10 percent of the tea which is not marketed through auction but private sales under e-auction”
The minister sighted the success of cardamon e-auction system which was introduced last year. More cardemon is coming through e-auction system now, before 50 percent of total production would go through traditional auction route but now almost 60 percent of the total cardamon production in the country comes through e-auction route and the price realisation went up 30-40 percent, he pointed out.
The initial target to launch the e-auction system was end of 2007 but it would be made 100 percent operationalised by September 2009.
We hope that by September 20, 2009 the e-auction system would be in place in all the six operational centres of TBI and all the tea auction that happens through traditional route would be migrated to e-auction system route, said Basudeb Banerjee, chairman, Tea Board of India. We expect to see the proportion of tea marketed through auction increase, said Banerjee. The existing physical auction centres would be converted into warehousing and distribution centres, with warehousing being a major constraint in Kolkata and other areas.
The new e-auction system redesigned by National Stock Exchange IT department with better and easier settlement process costed around Rs 18 crore, 9.34 crore would be given to NSE IT for designing the system and the rest would be used over the next three years time for maintenance and other facilities, said Roshni Sen, deputy chairman, TBI.
The new system would initially be run by the TBI for three years who are also exploring other models of ownership, pointed out Sen.
The e-auction system would be rolled out on December 8 and 9, in Guwahati and Dibrugarh,Jalpaiguri and Siliguri on 13 and 14 December in Cunnoor, Coimbatore and Kochi on 19 and 20.
"We should stop thinking of fragmented market and bring in one large national cyber based market to help boost the industry and transform India into a giant auction centre with international buyers from anywhere across the world," the minister added. The e-auction system was flagged off in Kolkata with 20 odd buyers participating in the bidding process for the auctioning of 1.5 ton of tea.
