Even as existing tea e-auctions continue to face technical hurdles at several centres, the Tea Board of India has decided to expand accessibility of the model nationwide, giving access to buyers located in other parts of the country for online bids.
According to Tea Board officials, a pan-India access to e-auctions would benefit buyers located at distant locations from the centres. Discussions have been initiated with the technical partner to make the software user-friendly and foolproof.
“A concept paper has been finalised and we are talking to the information technology team to make necessary changes in the software, to make it convenient to access from any part of the country. We expect this pan-India access to e-auction would start from January 2013,” said Rajeev Roy, financial advisor and chief accounts officer. “This will increase participation of bidders from other centres. While trade volumes might not see a sharp rise, it would improve value realisation for sellers. And, buyers from other parts of the country will get access to different types of teas.”
| FOR A CUPPA TEA | |
| Date | Status of tea e-auction |
| May 7,’09 | Cumulative first million kg of tea sold through e-auction |
| Nov 11,‘09 | Cumulative 100 million kg of tea sold through e-auction |
| Jul 14,’11 | Cumulative 1,000 million kg of tea offered through e-auction |
| Sept 28, ‘11 | Highest sale in a single day (amount) Rs 57 crore |
| Nov 11, ‘11 | Highest no. of online users recorded in a day 1,226 nos |
| Nov 16-18, ‘11 | Highest lots offered in an auction center– 6,924 (Guwahati) |
| Nov 24, ‘11 | Highest quantity offered in a day 7 million kg |
| Nov 24, ‘11 | Highest quality sold in a day 4.9 million kg |
| Dec 22, ‘11 | Cumulative 1,000 million kg of tea sold through e-auction |
Of the seven key tea auction centres, four are located at Kolkata, Guwahati, Siliguri and New Jalpaiguri. The other three are at
Kochi, Coimbatore and Coonoor. The average weekly trade at these is 200-300 kg of different types of teas —CTC, orthodox, Darje-eling, dust, etc.
Since implementation in 2009, the e-auction mechanism has faced criticism from traders. The allegations are lack of transparency, frequent link-failure and financial loss due to disturbance in the procurement cycle.
“It is very disturbing to note that recently the auction at Kolkata, scheduled for October 3, has been postponed for a week due to a technical snag in the system. This has, once again, proved that the public auction of tea through e-auctions is not at all satisfactory,” said Piyush Desai, chairman of the Wagh Bakri Group and president, Western India Tea Dealers Association. He alleged innumerable incidents since the start of auctions this calendar year of delay or postponement due to technical snags.
“Link failure has become normal at some centres. Traders are forced to wait the entire day for the link to get restored. This creates uncertainty of supply and, thereby, escalates prices,” said a trader based in Kolkata.
“Buyers’ orders for a particular lot, price and quality get delayed. On the seller’s side, his receivables get delayed, affecting payments to labour and warehouse costs, etc. E-auction sees a link failure at least three-four times a year,” said a trader from Guwahati.
Most of them demand a more user-friendly e-auction. “Tea buyers are awaiting implementation of the parliamentary standing committee’s final report on tea e-auction. Headed by Shantha Kumar, the committee had severely criticised the working of e-auctions and proposes to review the system. We hope that will be taken up soon,” said Desai.
The Tea Board said link failures were mainly caused by infrastructure limitations. “We are replacing broadband internet connections with dual leased-line connections. This will be implemented by the end of October and we expect that would overcome the link-failure issues. However, it is the responsibility of the respective e-auction centers to comply with the infrastructure requirement of the mechanism,” said the Board official.
