GTAC faces bleak future

Assam tea hub in doldrums


Guwahati, June 9: The future of the Guwahati Tea Auction Centre appears bleak with the Calcutta Tea Auction Centre upstaging it from the top spot for the second consecutive year.

“The future looks grim, and it would be sad if some initiative is not forthcoming from the government. Questions need to be asked as to what went wrong,” Kamal Das of Paramount Tea Marketing, a broker firm registered with the Guwahati centre said.

The centre was set up in 1970 to help the tea industry play a pivotal role in the state’s economy and enable local entrepreneurs to get a slice of the tea trade.

But warning bells were sounded a few years back when the Jayanta Madhab Committee on tea had said only mediocre varieties of tea were being offered at the Guwahati centre, resulting in lower prices. The Calcutta Tea Auction Centre was getting better varieties of Assam tea.

Assam produces 500 million kg of tea, and ideally, at least 50 per cent of that — 250 million kg — should be auctioned in Guwahati. But the situation has not been ideal at all, with only 126.62 million kg being sold in 2010-11 and 138.22 million kg sold in 2009-10.

On the other hand, in Calcutta, 152.28 million kg of tea was auctioned in 2009-10, whereas the highest quantity of tea ever auctioned in Guwahati was 159 million kg in 1999-2000, with a continuous downslide ever since.

The dip in sales volume has now led to renewed concern that the auction centre will face a tougher task if certain issues are not redressed properly.

Sources said till few years back only big companies, having tea estates in Assam, used to sell through Calcutta, but since last few years, even proprietor gardens have started sending their teas there, a trend that increased last year.

This year, even bought-leaf factories of the state have started sending their teas to Calcutta.

But the question is why do buyers pay Rs 10 per kg more at Calcutta while the same quality of tea is available in Guwahati.

The buyers say they are not able to pay on a par with Calcutta tea auction buyers because of a difference in quality.

The argument put forward by many that buyers prefer to operate from Calcutta because of better competition there does not hold good any more with electronic auctions.

“Buyers can now bid from Calcutta or elsewhere and the samples will be sent to them the next day,” Das said.

He said the chairman of the Guwahati Tea Auction Centre would have to personally visit Calcutta and lobby for its cause like its founder chairman Dharmananda Das had done. He had managed to convince a big export buyer like J.V. Gokul and Company Private Limited. But after Gokul, no export buyer has been operating here, he added.

According to sellers and producers, buyers do not offer good prices at Guwahati. In Calcutta, the sellers get good prices (Rs 7 to Rs 10 more) for the same quality of teas.

Moreover, as most buyers in Guwahati are agents, they are not in a position to bid after a certain price level.

A few years back, state industry and commerce minister Pradyut Bordoloi had reeled off statistics about how at least 10 major companies with gardens in Assam were bypassing the Guwahati auction centre and selling thro-ugh the Calcutta auction centre. But there was no impact of the revelation, with companies continuing to bypass the Guwahati centre.

Secretary of the Guwahati centre Jayanta Kakati said the Indian Institute of Management, Shillong is about to conduct a study into the reasons behind the decline in tea sales here and added that the terms of reference for the study were being finalised.

Bidyananda Barkakoty, member of the sales sub-committee of the centre, said adopting proper marketing strategies to attract both buyers and sellers with tax benefits for teas sold through the centre were some steps that could help reposition the centre as the number one CTC tea auction centre in the country.

Secretary of the Guwahati Tea Auction Buyer’s Association Dinesh Bihani said Calcutta had more competition because it had a good local tea market.

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