India's leading B-school IIM-Bangalore has been entrusted to devise the revamping of the existing tea auction methodology for improved price discovery.
A tea industry source said that the Tea Board has formed a special committee and put the process on fast track mode.
The decision was taken 25 days ago, the source said.
"Hopefully, price discovery will be better after the revamp, as the present prices in north India is making it difficult for the industry to survive," the source said.
In north India, prices should rise by Rs 30 to Rs 35 per kg from the existing flat levels of Rs 153, as compared to south India, where prices were up by Rs 30 per kg from the present levels of Rs 100.
"South Indian tea is cheap and poor in quality as compared to north India. Prices of such tea are rising because people are demanding cheap tea and marketers are making good efforts to make them saleable," he said.
The source said that if prices do not increase in north India, many gardens would close down, as is happening in the Dooars region of West Bengal.
"Many gardens will become sick and close down," he said.
Even the scenario in Assam is not good, he added.
The existing e-auction system started in early 2009 but has been faced with glitches.
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