Non-cooperation of tea buyers in the Cochin Tea Auction has resulted in unsold tea piling up in warehouses, officials of the Tea Buyers Association said.
The state-run Tea Board decided to go for a new pan-India auction in order to connect all the auction centres across the country and overcome the constraints of the existing electronic auction system of tea and to increase wide participation of buyers and sellers in the auctioning process.
Small tea buyers in the state of Kerala are up against the new pan-India e-auction of tea which they say discriminates against small buyers.
According to the data provided by the Tea Buyers Association, 4,14,000 kg of tea was sold on Tuesday from 10,69,000 kg put on sale. Only nine buyers participated in the auction process on Tuesday.
The Association of Planters of Kerala (APK) reported that hindrance in the auction process for the last three weeks has resulted in piling up of nearly 20 lakh kg of tea at the auction centre.
The alarming fact is that the average number of bidders in Cochin dropped from an average 100 to less than 10.
“This clearly underlines the fact that only massive buyers could survive in the new system and
the small and medium buyers will be left out,” Dharmendra D Vora, president, Tea Buyers Association, said.
The Tea Buyers Association of Cochin has been intimating the Tea Board of India that the proposals put forward in the new pan-India auction rules are formulated without considering the existing procedures and practices followed in each centre ever since the dates were fixed, he said.
“It may not be a surprise if some of the growers default in the statutory payments. This has created serious cash crunch situation to the growers, who are already reeling under heavy losses due to high cost of production and low prices.
“The cash realised through the auction was acting as a lifeline for meeting the operational expenses of the tea estates,” C Vinayaraghvan, chairman of APK, said.
Vinayaraghvan added that the new rules will definitely bring in much needed transparency in the auctioning system. He said APK is of the opinion that the concerns raised by the buyers, if genuine, should be settled amicably at the earliest in order to avoid a total shutdown of the tea industry in the state.