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Our Bureau

Electronic trading launched at Calcutta Tea Auction Centre

Kolkata , June 20

On the lines of the Special Tea Protection Fund (SPTF), the Commerce Ministry is planning similar funds for re-plantation activities in coffee, pepper and rubber sectors.

This was announced by Mr Jairam Ramesh, Union Minister of State for Commerce on the sidelines of the inauguration of electronic trading at the Calcutta Tea Auction Centre.

Contours ready

According to him, the broad contours of these funds are ready. Currently, the respective commodity boards have been asked to prepare detailed reports and it would be submitted soon.

"Thereafter, the matter would be placed before the Union Cabinet for formal approval. We hope by January, next year, we would prepare the detail report for the Union Cabinet," Mr Ramesh said.

According to him, the pepper industry would need approximately Rs 400 crore for replantation activity in 50,000 hectares of land. Similarly, the coffee sector would need Rs 600 crore for 90,000 hectare of replantation and rubber would require around Rs 500 crore for 50,000 hectare.

Similar to SPTF

The nitty-gritties of these three funds would be more or less similar to that of the SPTF. However, each of these funds would have different names as these would be dealing with specific commodities.

On SPTF, he said, the first disbursement was likely to be made around November, this year, just before the closure of plucking activity in the tea gardens. The intention was that corporate houses should have access to the fund during the winter season.

According to Mr Basudeb Banerjee, Tea Board Chairman, the matter would be discussed with the Union Finance Ministry's Departments of Banking and Expenditure.

Mr Ramesh said the Tea Board would not be managing the daily activities of the fund. Instead, a special treasury team would be created for that purpose. At present, SBI Caps is advising the Tea Board.

"We might appoint a professional team for managing the fund", he said.

E-auction inaugurated

All the six tea auction and two new proposed centres will ultimately be integrated into one platform once the electronic auctions are completely installed.

Mr Jairam Ramesh earlier said inaugurating an electronic auction system at the Calcutta auction Centre. The function was organised by the Calcutta Tea Traders Association.

Calcutta Auction Centre is the last of the six centres to introduce electronic trading. This centre is the oldest operating tea auction house in the world after London Auction Centre closed its operations in 1999.

According to Mr Ramesh , the existing software for electronic tea auction has flaws both in principal and process.

Tech report by July 31

By July 31, the National Stock Exchange's wholly-owned infotech subsidiary NSE.IT would prepare the technical specification report.

In August, the Tea Board Chairman, Mr Basudeb Banerjee, will hold a series of meetings with all stakeholders. Thereafter, it would take six months for the preparation of the software.

"By March 2007, we hope that test software will be available and by May 2007 it would be implemented for commercial activity. Our ultimate target is to integrate all the auction centres," Mr Ramesh said.

2 new auction centres

Meanwhile, two tea new auction centres at Jorhat and Dibrugarh in Assam are likely to be opened soon. The Minister assured the tea industry that funds for the introduction of electronic auctions would not be a problem.

Currently, only 47 per cent of the tea produced in the country is auctioned through the electronic mode. Moreover, good quality teas are hardly sold through this mode.

"We want a better, transparent and lucrative system of price discovery and it should be attractive to everyone, buyers, sellers and brokers. We hope that larger and better quality of teas is auctioned on the new platform," he said.

Consulting firm

The board has also sought suggestions from NSE.IT for modernisation of the existing hardware that has already been installed in the six auction centres.

AF Ferguson, a consulting company, which had earlier prepared report on tea auctions, has been re-appointed. The global consultant will help the board identify flaws in the existing system and prepare a new software.

Mr Banerjee said while shifting over to the electronic mode there would be a "change management problem" but ultimately, he hoped that transaction cost and time would come down.

More Stories on : Plantations | Tea | Coffee | Rubber | Spices & Condiments

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