For the first time in the history of Kochi auctions, 100 per cent of tea on offer in leaf sales remained unsold on Monday, as buyers abstained from trading.
“The quantity sold was virtually nil against the offer of 2,79,450 kg, as all the members stayed away from the auction in sale no 27,” highly placed sources in the tea trade told BusinessLine .
The non-participation of tea buyers — large, medium and small — comes in the wake of the protest led by Tea Buyers Association on certain unfavourable conditions in the newly introduced pan-India tea auctions.
In normal business transactions, there would be a sale of around 80-85 per cent. There are about 190 active members in the association and majority constitutes small and medium buyers, the sources added.
Initially, the auction on leaf sale has been proposed on Thursday (July 7), but was advanced to Monday because of Ramzan. As the ongoing issue vis-à-vis pan-India auction is going out of proportion, the sources said that the dust sale, proposed to be held on Thursday, would likely to be affected unless any policy changes on pan-India auctions happens. As many as 10,90,211 kg was on offer in dust sales.
The lower participation of tea traders had affected Kochi auctions right from the sale no 25, with only 715 lots of dust grades getting sold out of the 1,743 offered lots. Quoting figures, the sources said that the sold quantity in leaf varieties was only 399 lots against 838 lots offered. Subsequently, the sale no 26 also witnessed poor deal with only 529 lots was sold against 1,927 lots offered and in leaf grades, it was only 14 lots against 846 lots.
It may be recalled that Tea Buyers Association had alleged that some provisions in the pan India rules, especially with regard to division of lots, absence of any terms in splitting the lots and banning of proxy bidding is impacting several small and medium traders at Kochi auctions.
According to Dharmendra D Vora, the Association President, said the implementation of minimum lot size of 20 bags to be purchased by a single buyer would hinder purchasing/competing power of small and medium traders. It would result in the reduction of competition and more over, the small and medium buyers will be out of trade. The minimum lots size of purchase has been fixed arbitrarily without considering the ground realities prevailing in the Kochi centre.