In a related development, tea producing countries are toying with the idea of forging an international alliance to ensure a better bargain in the global market in view of the recent developments in commodity trade.

Talking to The Financial Express on the eve of the 106th annual general meeting (AGM) of the United Planters Association of South India (Upasi), the Tea Board chairman, AS Ahuja, said that it is high time for the industry to ensure a coherent and complete price discovery system for the commodity to ensure stability in the market. He said, the board in association with the industry is going ahead with the idea of introducing futures trading in tea in a bid to smoothen the yo-yo movement in prices during the past several years.

"We need to put in place an impeccable mechanismthat will ensure the welfare of all parties concerned," said the chairman of the Tea Board. He said, the board has taken up the issue "very seriously" and would ensure the effective functioning of the mechanism in close collaboration with other parties concerned including the Forward Markets Commission (FMC).

He said the board has commissioned the Institution of Plantation Management, Bangalore, to prepare a complete and effective blue print for starting futures trading in tea. The institute, which pioneers research and innovations in plantation crops, is expected to submit the report in two months time, he added.

He said the idea of introducing futures trade in tea is in the top of the board's agenda following the wild swings in prices in successive auctions. "Volatile prices are playing havoc in the market. A stable and steady price will prove remunerative for all parties concerned including growers, traders, buyers and the end-users," the Tea Board chairman said.

He said, if the board's plan goes ason schedule, India will be the first country to open futures contract in tea. This would provide the country with a first mover advantage in the sector of better price discovery mechanism, he added.

He said, on the lines of other international commodity producers association, the tea producing countries have opened dialogue among themselves to forge a common association with a single goal of ensuring remunerative prices for growers. Though the initiatives in the past fell through, the current steps are poised to achieve a tangible result, he added.

The countries that are likely to join the proposed international association of tea producing countries set up on the lines of the coffee growing countries, are India, Sri Lanka and Kenya. The Kenyan delegation, which was in Kochi to attend the First International Tea Convention mooted the idea and the delegates from other countries immediately concurred with it.