Tea Board works towards reforms in e-auction system
The Tea Board of India is working towards reforming the eauction system it introduced 11 years ago but wants to minimally intervene in this process.
The Board wants various stakeholders in the industry to lead the e-auction modernisation drive and come up with the requisite software and platform, which is expected to better price realisations.
“The Tea Board would like to have the best system in the world but it will intervene minimally in the process,” Arun Kumar Ray, deputy chairman of the Tea Board, said during the annual general meeting of Indian Tea Association.
Ray clarified it was better if stakeholders from the sector came up with a platform to address the nitty-gritty of the trade and the practical problems they face in the process.
In May 2016, the Board had launched a pan-India auction module, which aimed at creating a common marketplace for the buyers and sellers and improve prices. However, the module snapped for sometime on the day of its launch. Later, the buyers, sellers, and brokers raised issues such as settlement of payment problems to cataloguing to price discovery.
Although it is in place, improvisation of the auction process has been suggested by stakeholders in the tea industry. Ray said the Board can provide for necessary funds to implement upgrading the current e-auction mechanism, but the industry has to take the leadership.
Azam Monem, the outgoing chairman of ITA, said: “The digitalisation of the auction system way back in 2007 held the promise for a reduction in transaction costs and fair price discovery for the producer. The system needs an overhaul and reforms brought in to eliminate wastage and bring in more efficiencies. There is, thus, a need to reexamine the high transaction costs, including free sampling, bidding processes, and efficient logistics.”