IIM-Bangalore Tasked With Upgrading Existing Methodology Of Online Tea Auctions As Industry Faces A Crisis

For improving the existing price discovery at tea auctions, Indian Institute of Management (IIM) Bangalore is coming up with a new means to upgrade the existing methodology. A special committee has been put to work on the process in a fast-track manner.

The Indian Express quoted a source from the tea industry as saying, “Hopefully, price discovery will be better after the revamp, as the present prices in north India are making it difficult for the industry to survive.”

Normally, in the northern part of the country, prices should be rising by Rs 30 to Rs 35 per kilogram as compared to the current price of Rs 153. In the south, prices went up by Rs 30 from the current Rs 100.

He adds, “South Indian tea is cheap and poor in quality as compared to north India. Prices of such tea are rising because people are demanding cheap tea and marketers are making good efforts to make them saleable,” The Indian Express reported.

In the Dooars region of West Bengal, many tea gardens are closing down due to low prices in the market. The pattern will follow in many other places in the north, should the prices not increase. The situation in Assam is bad too, he says. In 2009, the process of e-auction started, but with a lot of glitches.