Tea trade in the country has run into rough weather with more than a million kg of tea is lying in warehouses due to glitches in the auction software, traders said.
Auctions in many centres have been postponed several times and small tea buyers who have not been able to take delivery after remitting money are a worried lot.
Ajith MK, chairman of Cochin Tea Traders Association, told FE that the problem is in the post-auction module. “Buyers are not getting delivery order after paying money and the trade is stuck. Buyers’ money is stuck in the auction account and sellers are also not receiving the money. Tea is piling up in the warehouses and exporters too are worried,” he said.
Tea auction in Kochi remains suspended for the last four weeks and the effort to restart the auction on Friday also failed, Ajith said. Sources said that fifty lakh kg of tea is stuck in warehouses in Kochi. The state-run Tea Board has decided to go for a new pan-India auction connecting all the auction centres throughout the country to overcome the constraints of the existing electronic auction system and to increase wide participation of buyers and sellers. Earlier, there were seven registered E-auction centres in the country where auctions were conducted through the electronic platform provided by the board with about 534 million kg of tea sold last year.
“The problem is pan-India and the trade is suffering. It is reported that Rs 300 crore is stuck in the trade. Tea Board should take action to rectify the problem,” Sriram Narayanaswamy, president of Global Tea Brokers said.
Numerous complaints are coming in where payments have been made to the wrong seller or payment is less or more than the actual amount, Ajith said. In the e-auction, which is operated by NSE, delivery orders should be generated within two hours but now they are taking 2-3 days. Moreover, these orders are supposed to be digitally signed, he added.
Tea Board is convening a meeting of all the stakeholders on October 17 in Kolkata to sort out these problems, sources added.