Kolkata, May 10 (IANS) A pan-India electronic auction system of tea which is expected to increase wider participation of buyers and sellers in the process and to ensure fair price discovery was inaugurated here on Tuesday.
"This effort of pan-India electronic tea auction is quite consistent with the kind of electronic enablement that we are doing across all our institutions. This is going to be a great improvement," said Commerce Secretary Rita Teaotia after inaugurating the system.
"With this effort, the auction is expected to be easier and more transparent. It will ensure greater participation of buyers and sellers so that there is a much better realisation of returns in a simplified format," she said.
The system which is designed and developed by the Tea Board with consultation with all the stakeholders will enable buyers registered with a single auction centre to participate in the auction process of other centres as well.
Till now, the existing electronic auction process was region- and centre-specific, with restrictive participation of buyers as only those registered at a centre couldd only participate in the auction process of that centre.
There are seven auction centres in India - Kolkata, Guwahati, Siliguri, Jalpaiguri, Kochi, Coonoor and Coimbatore where auctions are being conducted through electronic platform provided by Tea Board.
Manual auction tea in India started in 1861 and the region and centre specific electronic auctions commenced in 2009.
About 534 million kgs of tea are sold through e-auction system.
Pan India e-auction process is expected to kick-start in the third week of June this year.
"Introduction of a settlement banking system and routing of entire post auction payments through the auction system via the settlement bank is one of the important features of the pan India e-auction process," a statement said.
This system will ensure transparency in the process and timely settlement of dues since the bank will act as a settlement agent between all the stakeholders -buyers, brokers, sellers and warehouses, it said.
Tea Board chairman Santosh kumar Sarangi said: "There are certain hesitations relating to settlement mechanism, VAT payment system which will be made by outside buyers. But this is a ongoing process. The board along NSE.IT remains committed to resolving the issues."
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