The Hindu Business Line : Buyers stay away at Kolkata tea auction

Auctions at the Calcutta Auction Centre almost came to a standstill as major buyers stayed away to protest against the recent Tea Board's decision to hike the buyers' brokerage rates.

Sources in the auction house said apart from a couple of leading tea companies, all the major players did not buy any tea on Tuesday's auction.

As a result, the auctioneers kept on announcing the details of the lots but there was no one to buy.

Main buyers

Though majors such as Hindustan Lever and Williamson Magor did not buy any tea, still others such as Tata Tea and Goodricke Group participated in the auction and purchased some tea.

On April 7, the Tea Board issued a directive stating that the buyers' brokerage has been increased from a flat rate of Rs 5 per 100 kg to an ad valorem one.

The new rates that were announced are 0.30 per cent in Kolkata, 0.22 per cent in Guwahati and 0.20 per cent in Siliguri.

`Hike is too high'

Tea buyers are saying that they are not against a hike in the brokerage but it had been done without their consultation.

Moreover, they felt that the increase in the brokerage rates is too high.

Other centres

Guwahati and Siliguri auction centres, which are scheduled to be held later during the week, are likely to experience a similar situation, auction house sources said.

The buyers of these three auction centres have already submitted a memorandum to the Union Commerce Ministry protesting against the Tea Board's decision.

Business Line tried to contact Mr Basudeb Banerjee, Tea Board Chairman, to get his views on Tuesday's development.

He was, however, not available for his comments.