India Tea E-Auction Still A Mess

FAITTA, India’s professional tea traders association, asked the nation’s tea board in January 2021 to evaluate the digital auction process thoroughly. FAITTA members believe that even after five years of running, the system is still failing to create a fair bidding experience for the traders.

Viren Shah, a member of FAITTA, claimed that the bidding process can lead to an unnecessary hike in tea prices that can cause a skew in price norms. Shal also said that the knockdown mechanism in the bidding process can also affect traders’ participation in the long run. Consequently, this will be counterproductive to the Tea Board’s original intention.

The auction prices for tea increased by 31% in 2020. However, this was not caused by the working bidding mechanism. It was due to a shortage in tea production rate and issues in the ground distribution processes. Currently, no one is sure about the exact reason behind the production shortage. In 2020 alone, India’s tea production dropped by 18.2%.