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L.N. Revathy

Coimbatore , April 22

THE South Indian tea industry is irked by the frequent interruption in the electronic auction system in recent weeks. Their annoyance has come to the fore after a complete switchover has been made from the conventional `outcry' to screen-based bidding.

Left with no alternative solution for continuing the auction process in the event of a systems failure/collapse, the trade has sought the immediate intervention of the Tea Board and the Commerce Ministry for rectifying the system.

The trade contends that in such an eventuality the usual bureaucratic requirement such as obtaining prior sanction from a prescribed authority for change over (however temporary) would not work, particularly when specialised technology is involved.

A broker from Coonoor told Business Line that the system crashed soon after the trading session commenced on April 14. "We could not shift to the manual mode because in e-bidding, the bidder need not be physically present in the auction hall. He can bid from any location. Since the process came to a standstill, the committee decided to conduct auction in the manual outcry mode the following day. But the Tea Board raised objections to the decision, and the sale was postponed to April 18. While the opening levels were down by Re 1a kg on April 14, it slipped by Rs 5 a kg when the market opened four days later. Huge quantities (about 23 lakh kg - two week auction offer quantities) had piled up by then, causing a steep drop in price levels. Besides the falling rates, the unsold quantities also rose to 70 per cent. The Tea Board could have stopped this drastic fall by intervening and resolving this issue," he said.

Traders say the postponement of auctions resulted in cash crunch and the consequent need for producers to borrow at high rates from the banks. "The stock pile-up because of cancellation/postponement of successive auctions has resulted in rate crash to unreasonably low levels, which the industry can ill-afford to absorb at this point in time," said Mr C. Sankarnarayan, Adviser, Planters'Association of Tamil Nadu (PAT).

Meanwhile, brokers said the market dropped by Rs 3 to Rs 4 a kg on Friday in Coimbatore, where the weekly catalogue quantities range between 3 lakh and 4 lakh kgs compared to 11 lakh kgs in Coonoor.

The trade is now seeking for some improvement to the system.

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