The Hindu Business Line : Tea factories seek manual auctions

NILGIRI Bought Leaf Tea Manufacturers' Association has appealed to the Union Government to re-introduce the manual system of auctioning in South India.

The association is the apex body representing owners of tea factories in the private small tea sector of Nilgiris, whose teas dominate the auctions in Coonoor.

In his representation to the Commerce Minister, Mr Kamal Nath, the Secretary of the Association, Mr S. Jayanthilal, has alleged that, after the introduction of compulsory e-auctions in the South, the prices had crashed like never before.

"Today, teas are selling around Rs 20 a kg - a price that prevailed 30 years ago. The fact is 90 per cent of the teas produced in the South are sold through the auctions in Coonoor, Coimbatore and Kochi. Although low exports, continued imports and high crop are some of the reasons for the price drop, the frequent break-down in the electronic auction system, leading to interruptions, and the consequent piling of unsold teas has been mainly responsible for this disastrous situation," Mr Jayanthilal told the Minister.

The impact is serious. Already, the price paid to the small growers has dropped to Rs 3 a kg, while the cost of cultivation is Rs 6.50. "Nothing short of a highly explosive situation is prevailing in the Nilgiri hills now. The growers have already staged agitations. The bought leaf factories downed their shutters on Wednesday. The Government should come to our rescue," he said.

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