Agri Business

Kochi tea trade raises concern over introduction of Japanese auction system

Our Bureau Kochi | Updated on September 21, 2021

Urges Tea Board to hold talks with stakeholders to arrive at an acceptable solution

The Tea Trade Association of Cochin has voiced concern over the introduction of the Japanese system of auction, saying “it is now threatening to distort the flavour of the tea trade, even if the flavour of tea remains unchanged”.

“We have reason to be disheartened by this experimentation that has little to do with the ground reality,” said Appu Kurian, the outgoing chairman of TTAC.

Addressing the 29th annual general meeting, he said the auction system is predicated upon its utility as a price discovery mechanism and resolving the flow in the channel from the bush to the cup. A system that appears to do away with traditional acceptance of the highest bid cannot really be in sync with the objective, he said.

“We urge the Tea Board to bring this proposal back to the drawing board so that fruitful discussions with the stakeholders could yield a reformulation that suits us to a T,” he said.

The Tea Board as a facilitator should have been a catalyst for changes that improve the value-added chain of this crucial sector, he added.

It may be recalled that the Japanese model auction system has been suggested by the Indian Institute of Management Bangalore to improve the participation of buyers in the pan-India auction, to further improve the existing system for better price realisation, simplifying the process which could lead to an improvement in the quality of tea offered in public auctions.

Referring to production last year, the chairman said Kerala produced 63.09 million kg against 59.05 million kg, showing an increase of 4.04 million kg. The average price realised from the Cochin Auction Centre during 2020 was Rs 140.42 as against Rs 127.06 for Coonoor and Rs 130.38 for Coimbatore. The total exports from South India stood at 84.15 million kg in 2020 as against 99.80 million kg in 2019, with a decrease of 15.65 million kg.

Published on September 21, 2021

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