KOLKATA, West Bengal Coonoor tea auction house
India’s exclusive colonial-era tea auctions are at an end.
Sales of fabled Darjeeling tea in club-like settings of yore will transition to Tea Board monitored e-auctions beginning in June. The Darjeeling region annually produces about 9 million kilos of some of the most expensive tea in the world. Teas from there were first auctioned in December 1861.
Since the late 1800s the small quantities and high prices encouraged traditions that included on-site tastings in ornate buildings in Kolkata prior to bidding, an experience quite unlike the computer-assisted auctions in office-like auditoriums at six sites elsewhere in the country.
The Tea Board of India introduced semi-automated bidding in 2009 at auction houses across the tea lands where volume much more important than comparing the finer points of aroma and taste. In Coonoor, for example, as many as a hundred bidders sit at workstations in an amphitheater facing the auction managers who are huddled around monitors at a table set on a stage.
In Kolkata bidders meet weekly in the 12-story Nilhat House on Mukherjee Road, a few blocks from the Calcutta High Court. Lavish events marked the sales of each spring’s first-flush tea. Auctions for the region’s production of CTC (cut, tea, curl tea) and Assam orthodox have long since transitioned to computers, but brokers and buyers trading Darjeeling teas resisted the change even after e-auctioned teas accounted for the majority of tea sold. Last year 534 million kilos of the country’s 1,197 million kilos of tea were sold electronically. Tea grown in West Bengal and Assam accounted for 963 million kilos of total production in 2015-16. In 1984 half of the tea sold was at private auctions but by 2000, following government mandate, auctions accounted for 80% of tea sales. Quantities have since declined with deregulation. Private bids once again account for about 50% of sales, but the teas sold privately bring premiums 100 times greater than commodity tea.The highest price paid at auction last year was INRs 182.96 per kilo while Darjeeling tea regularly sell for Rs 10,000 a kg, according to a report in DNA India. The data was provided by the IT division of the National Stock Exchange, which maintains the auction system.
In making the announcement, Commerce Secretary Rita Teaotia said “The whole process of the development of this pan India tea e-auction has been developed in consultation with all the stakeholders. We couldn’t go ahead unless everybody weren’t part of this. The chairman of tea board and traders had sat down to find the best way in which the auction should be done. An effort has been made to address all these concerns,” she told DNA at the launch of Pan-India e-auction system.
It was good while it lasted, with close ties forged between buyers and sellers but ultimately the club which consisted primarily of UK and German, North American and Japanese buyers, was seen as artificially constraining price discovery, leading the Tea Board to act.
Now the entire world can bid on Darjeeling tea.
Source: India Tea Board, DNA India
The highest price paid at auction last year was INRs 182.96 per kilo while Darjeeling tea regularly sell for Rs 10,000 a kg, according to a report in DNA India. The data was provided by the IT division of the National Stock Exchange, which maintains the auction system.
In making the announcement, Commerce Secretary Rita Teaotia said “The whole process of the development of this pan India tea e-auction has been developed in consultation with all the stakeholders. We couldn’t go ahead unless everybody weren’t part of this. The chairman of tea board and traders had sat down to find the best way in which the auction should be done. An effort has been made to address all these concerns,” she told DNA at the launch of Pan-India e-auction system.
It was good while it lasted, with close ties forged between buyers and sellers but ultimately the club which consisted primarily of UK and German, North American and Japanese buyers, was seen as artificially constraining price discovery, leading the Tea Board to act.
Now the entire world can bid on Darjeeling tea.
Source: India Tea Board, DNA India