The Tea Board of India has decided to revert to the erstwhile English auction model for auctions across the country, considering the drop in sales through the Bharat auction system. The Board introduced Bharat auctions in 2022 for better price discovery, lower transaction costs and ensure the quality of tea sold through the auction system.

Plea from stakeholders

A decision to this effect was taken on Monday following the representations by stakeholders to Deputy Chairman, Tea Board, highlighting issues related to Bharat auction. The Board has given necessary timelines for reverting back to English auction to all auction centres in the country.

Hence, sale no 39, which is scheduled to be held on Tuesday (September 26), has been cancelled for all auction centres for server installation for English auction. Similarly, sale no 40 has also been cancelled. These will be held from October 3 to 6 and sale 41 will be held on October 17.

Highly-placed sources in the Kochi tea trade told businessline that the objections raised by the North Indian tea lobby against the Bharat auction prompted the Tea Board to revert to old English auctions. However, the protest from the South Indian tea trade against doing away with Bharat auctions went in vain and the Board decided to go ahead with the new system after a study undertaken by IIM Bangalore.

Awry timing

Voicing concern, the sources said the trade has received the notice to cancel Sale 39 on Monday evening and the postponement of auctions for three weeks is likely to create a shortage of tea in the market despite a good production. At a time when Iran has started buying tea from Kochi, the stoppage of auction will upset all stakeholders in the trade.

L Vairavan, a tea manufacturer in Coonoor, said the postponement of two auctions without any consultation will have serious financial implications for the growers, traders and producers. Now it is the peak production season and it will have an impact on the business. Bharat auctions were introduced in South India after carrying out several studies and the decision to reverse the system was taken after consulting with a few sections of the trade in North India. South India tea trade was totally neglected in this and no opinion was sought from any trade associations here, Vairavan said.

The North Indian tea trade urged the Tea Board not to cancel sale 39 and 40 as the catalogues had been uploaded and the trade samples had been distributed to the buyers, who had completed their pre-sale work. The sale proceeds before Durga Puja are required to pay the bonus to the tea garden workers.