Western Indian tea buyers to boycott auction over new order

Hyderabad: The entire western Indian tea traders and packers have decided to abstain from buying tea at auctions held at tea auctioning centres in eastern and southern India in protest against the Tea (Marketing) Control Order, 2003.

With the protest of western Indian tea packers joining the nationwide protest the auctions are expected to come to a grinding halt. The auctions have already been postponed over the last couple of weeks because of the protest. Tea traders feel that the compulsive registration and licensing would kill the medium to small tea packers.

Say Federation of Tea Traders Association of Maharashtra president Harendra Shah and Gujarat Tea Traders Association president Arvind Barcha: "The number of tea blenders are large in numbers as most of them are small in operational size. They do not use tea for their own purpose but sell forward to consumers. The new TMCO should keep the small blenders and packeters out of the purview of the order."

"The order will not only hurt the blenders and packeters but also the producers. Currently, it is the fag end of tea season and the new arrivals will begin only in late March or April. Most blenders have stocks for next four months and, hence, if they won't lift tea from the auction centres, it will lead to accumulation of old stocks and further depress prices in the coming months as supply will far exceed demand," says a leading tea packer.

Tea is an ordinary item of beverage and there is no logic in imposing "unnecessary and unwarranted restrictions" on the dealers in tea, in this era of liberalisation and globalisation, he adds.

Agency reports quoted R Ramanujan, president, Tea Buyers Association, Kochi, as saying that several provisions in TMCO, promulgated by the central government on 1 January 2003, will have far-reaching consequences on the tea trade.

He told reporters there that with the implementation of the recommendations relating to tea auction centres, all medium and small buyers operating in tea auctions for years would be automatically eliminated from the auctions.

The drop in the number of participants in tea auctions would weaken the system and it would provide opportunities for forming a monopolistic set-up which would in no way help the growers, he said. "A strange situation would develop where the Indian tea and trade would be under the absolute control of a handful of companies."