Tea planters in northern India, including Bengal, have raised concerns about the recently introduced “Bharat Auction” system, which they believe is responsible for declining tea prices. They are calling for the reinstatement of the old English auction system that has been in use for over 160 years. The new system is seen as restrictive and detrimental to small buyers, leading to a sharp decline in tea prices since its implementation in April.
The Bharat Auction system was introduced in northern India, including auction centres in Calcutta, Siliguri, and Guwahati. Under the Bharat Auction model, bids must be entered before the lots (each containing 30 tea packets) go live for auction.In contrast, the English auction system allowed bids to be made until a lot was sold, providing greater flexibility for buyers.
Planters argue that the new system restricts the bidding process and hampers competition. Division of lots, which was allowed under the previous system, enabled smaller buyers to participate. However, this option is unavailable under the Bharat Auction, limiting the participation of small buyers. The declining auction prices are causing cash flow issues for tea producers, particularly concerning financial commitments like workers’ bonuses, which are due in September/October.
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Data from the Tea Board of India reveals a decline in average auction prices in northern India. In 2022, the average price from January to August was Rs 206.07 per kilo, while this year, it has dropped to Rs 189.09 during the same period.The decline is consistent over the past five months since the introduction of the Bharat Auction system in April.
The Consultative Committee of Plantation Associations (CCPA), representing tea planters’ organisations, has written to the Tea Board of India, urging the suspension of the Bharat Auction system and a return to the English auction system. Tea industry veterans emphasise the need for fair prices and competition, which they believe were more attainable under the old system.
Trinamool trade union leaders have voiced their support for the planters’ cause and called on the Tea Board to address the issue promptly.
Tea planters in northern India are grappling with declining tea prices, attributing the issue to the newly introduced Bharat Auction system. Their plea to revert to the old English auction system underscores the importance of maintaining fair prices and fostering healthy competition in the tea industry. The Tea Board of India is expected to consider their concerns and engage with stakeholders to address the situation.
