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Tea buyers oppose electronic bidding

By Our Staff Reporter

KOLKATA NOV. 19. With the tea season nearing closure, the Union Commerce Ministry is pressing hard for reforms in the primary marketing system of tea in line with the recommendations of AF Ferguson & Co and PricewaterhouseCoopers before the next fiscal. On the priority list are compulsory sale through auction system, registration of buyers and electronic bidding for price discovery. The Tea Board has already approved the recommendations at a meeting in September in the face of strong reservations from the buying community and a section of producers.

Talking to The Hindu sources revealed that at a meeting held in the presence of the Tea Board authorities in New Delhi last week, the Ministry made it clear that they would not like to wait any further for introducing the new norms.

The Ministry was hardly convinced to the objection especially in regard to the `registration' issues and the `electronic bidding' from buyers and had asked them to co-operate for a smooth introduction of new norms for the benefit of all.

If implemented, all primary sales (from producers) would henceforth take place through registered buyers only giving the Board a thorough insight into the sales details.

Electronic bidding, on the other hand, is considered an antidote to free the auction system from the clutches of a section of buyers who exploit the existing system of price discovery through multiple bidding by voice, and maintain pressure on prices. Unlike the existing system whereby a buyer starts bidding from the lowest level, electronic bidding would allow only one bid per lot per buyer.

Hard pressed by the Ministry, the buyers' organisations have decided to form a core committee to be united in their approach in future.

"We are opposed to both registration and electronic bidding. While the first one would open the floodgates of bureaucratic intervention into the trading process, the second one in all fairness would only leave a negative impact on the trade," said a prominent buyer.

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