India

Some segments of India’s tea community have resisted the nation-wide implementation of e-auction, as demonstrated by the recent disruption of the Kochi auction which was boycotted by traders who said the system is "unfriendly".

The Tea Board remains committed to putting in place a 100% country-wide e-auction system "immediately" amid concerns that the delay in auctioning tea in Kochi could lead to shortages in the market and spoiled tea in storage.

"As the stocks have continued to grow, it is inevitable that the quality of tea will suffer in the moist and damp conditions prevailing in Kochi with the onset of the monsoons," according to M.K. Ajith, president of the Kochi Tea Buyers Association quoted in the Indian press. "The local shortage is also creating problems for the tea processing and marketing companies, whose popular brands have begun to disappear from the shop shelves. And they are beginning to be replaced by North Indian brands."

Traders have petitioned the Tea Board to introduce the e-auction gradually, suggesting that 75% of Kochi’s tea be auctioned using traditional bid and gavel methods.

"Kochi is the biggest tea auction centre in the South, not only in quantity and value of tea traded, but also in the diversity of the teas on offer," said Krishna Kumar Shah, chairman of Kochi Tea Traders Association. "Given the magnitude and complexity of the transition, give us more time."

But the Board is standing firm on its 100% e-auction implementation policy, citing the successful transitions in the Coimbatore and Coonoor auctions.

The United Planters Association of South India (UPASI) "strongly supports" the e-auction initiative of the Tea Board of India.

"The benefit of electronic auctions is already evident in terms of transparent and better price discovery where the system is fully functional," said D. P. Maheswari, UPASI president. "However, it is disappointing that certain segments are not fully appreciative of this initiative. The implementation of electronic auction should not dilute any of the inherent advantages that the electronic auction system provides, especially the anonymity of bidder since it is of utmost importance for fair price discovery," he added.