‘National cyber market will be in place by mid-2009’
KOLKATA: Union Minister of State for Commerce Jairam Ramesh on Wednesday launched the electronic auction system, signalling a paradigm shift in the 150-year old tea industry.
This should pave the way for evolving a national cyber market for tea, replacing the present fragmented manual auction centres across the country. “I do not know where I will be in September 2009, but I would like the Tea Board to implement this project by then,” Mr. Ramesh said.
Mr. Ramesh said measures were afoot to ensure that by January 27, 2009, teas sold through auctions would make a transition to the e-auction route. Following Guwahati and Siliguri, the southern centres of Conoor, Coimbatore and Kochi auction centres were also set to move to the e-auction protocol by January 20. “There will be no orders towards this, the aim is to make the system attractive enough for the migration,” he said. He assured tea traders that this would not lead to any job loss, but job profiles might undergo a radical change.
Moreover, there was a need to augment the warehouse capacity in various centres, especially here.
He said NSE.IT, a 100 per cent subsidiary of the National Stock Exchange, had done a good job of re-engineering the software for e-auction.
Better price discovery
At present about 500 million kg of tea in India, comprising about 52 per cent of the total output, is sold through auction with the best teas like Assam orthodox and Darjeeling being sold through private sales.
“The new system would lead to a better price discovery and at least five to ten per cent of private sales are likely to move to the auction route,” Mr. Ramesh said. Tea traders from Kenya, Sri Lanka, Nepal and China had shown interest in the e-auction system, he added.
Tea Board Chairman Basudeb Banerjee said this was the first time that e-auction was being introduced in any tea-growing region in the world. The target was to get all the six auction centres in Kolkata, Guwahati, Siliguri, Conoor, Coimbatore and Kochi to participate in the new system. “There is no alternative but to go ahead,” he said adding that the aim was to have a seamless national trading system and the Tea Board was working towards this.
Deputy Chairman Roshni Sen said the NSE was also designing a settlement system and management consultant Deloitte was working on a model to make the system a self sustaining one.
710 kg in five lots
Calcutta Tea Traders Association Chairman Gopal Poddar said tea traders had some concerns over the infrastructure for launching the new system. A total of 710 kg of tea in five lots was auctioned on Wednesday to mark the occasion with the prices varying between Rs. 120 and Rs. 210 a kg.