The Hindu Business Line : Tea trade concerned over frequent snags in e-auctions

"A year has gone by and we have through this journey extended our support and cooperation to the Tea Board. But the problems persist and the system conks out frequently, disrupting the smooth conduct of auctions. Further, when other auction centres take the manual route, we, at Coonoor, lose the level playing field by holding on to the electronic trading platform," say brokers.

Industry insiders allege the Tea Board of forcing the conduct of auction in the "electronic mode only" at Coonoor, while permitting other centres such as Kochi and Coimbatore to switch over to the conventional manual outcry method.

"Though the Board had envisioned linking all the six — Coimbatore, Coonoor, Kochi, Guwahati, Kolkata and Siliguri — tea auction centres by March 2005, the project is still not complete. Kolkata is yet to be drawn into the loop. Manual switching is approved at the Coimbatore auction centre and at Kochi, only limited quantities are traded on the electronic platform. If it is a rule, it should be applicable to all," argued a broker.

With the Board initiating penal action against those bringing in poor quality teas, the traded volumes have started to drop.

Market sources say the low volumes had not triggered the price level, as anticipated. "On the other hand, Pakistan has gone slow in buying teas from India and there is no concrete contract from Iraq. This has fuelled the situation," a broker told Business Line.

Recapitulating his experience at the auction last week, a source said: "Within 20 minutes of the commencement of bidding process, the system conked out. We waited for 20 minutes for it to re-start but encountered problems again within the first hour of trade. When we switched over to the manual mode, the price levels rose". The source said e-auction resulted in extended closing despite poor volumes because of frequent system disruption.

The weekly traded volumes have (in the last four weeks) averaged 7 lakh kg against 10 to 12 lakh kg during the corresponding period of 2005. "`The prices were also better last January compared to now," the source said.