Almost all the major exporters abstained from the tea auction at Kolkata on Tuesday in order to voice their discord with the Tea Board over several issues with the electronic auction. As a result, almost 35% of the orthodox tea put on auction during sale remained unsold.
Meanwhile, NSEIT-the organisation providing information technology solutions to the electronic auction, has been directed by the Tea Board ?not to suggest or implement any new modification or enhancements over and above the ones already approved by the core committee as on October 2010.?
According to buyers in Kolkata, such a situation may lead to a stalemate which could lead to further delay in bringing the entire auction in Kolkata centre under electronic mode. Moreover, the Tea Board has also put on hold the buyers’ demand of knocking down the ‘lot’ at the optimum price at the satisfaction of quantity.
While on Tuesday players like Hindustan Unilever and those buying for clients in Punjab?popularly called Punjab buyers?attended the auction, other exporters decided to abstain from the auction. As a result a lot of ‘broken’ variety of tea remained unsold. Roshni Sen, deputy chairman of the Tea Board, said, ?There are a few disturbances at the auction on Tuesday, I am yet to know the details.?
The buyers who abstained on condition of anonymity, said, that there are issues like payment uncertainty in the overseas market and quality control by the producers. ?There are some inherent flaws in the system and the buyers willing to pay higher are losing teas due to factors like time-out,? a buyer said.
The buyers in Kolkata, one of the biggest tea auction centres of the world, have put forward a set of suggestions aimed at bringing some modifications in the e-auction system. ?The system has a lot of lacuna and the authorities need to address the issues before they decide to bring the entire auction under electronic platform,? said Anshuman Kanoria, chairman of the Indian Merchant Tea Exporters’ Forum.
A few days back NSEIT asked Calcutta Tea Traders Association whether auction time for 2 lots can be set at 30 seconds from the present set up of 60 seconds for 4 lots. Buyers have said that without an extension window, 30 seconds is too small a time for buyers to evaluate the status, put in their bids and await response from competition.
?The machine accepts high bids with zero quantity attached which eventually helps in inflating the price. This actually helps in establishing cartels,? said a buyer. The cash-and-carry system introduced by the Tea Board after the Carritt Moran episode has run into rough waters too. ?The buyers are making advance payments with no time frame for the tea being delivered. On the other hand the private auctions offer 30 days prompt to the buyers,? said another buyer.