Establishment of tea auction centre stalls

  • Farmers say such a centre will guarantee them appropriate prices for their produce
- Biplov Bhattarai, ILAM

Feb 15, 2018-

The establishment of a Tea Auction Centre, which is expected to benefit tea farmers and entrepreneurs by allowing them to sell their products via auction, has been stalled due to lack of coordination among the concerned stakeholders. 

The National Tea and Coffee Development Board has said that essential preparations have been completed to set up the centre at Birtamod, Jhapa by consulting farmers, entrepreneurs and experts, but it is yet to materialise.

Farmers claim that the auction centre will permit them to get appropriate prices for their tea and boost their incomes by eliminating the commissions pocketed by middlemen. 

Almost a hundred small tea factories and more than a dozen large tea factories have to contend with fluctuating tea prices and rely on middlemen for sales.

Gayatri Basnet of Sankhejung said, “Although we produce quality tea, we don’t get appropriate prices for our products as we depend on middlemen. If we had an auction market, we would easily sell our products there.”

More than 80 percent of the tea produced commercially in the country’s eastern region is exported to India. About 10 percent is consumed within the country, and the rest is exported to Western countries. 

The price of tea in Ilam is heavily influenced by the prices set at the auction markets of Kolkata and Siliguri in India, which usually benefits middlemen more than tea producers.

The tea produced by small factories in Ilam is sold in the local market and to tourists who buy it to give as gifts. 

A few entrepreneurs sell their products in Kathmandu and Western countries through their personal links, and there is no long-term and sustainable management of the tea market. The National Tea and Coffee Development Board said that it planned to open the auction centre at Birtamod, Jhapa. 

The board wants to start by holding live auctions, and later switch to e-auctions where buyers and sellers conduct transactions through the internet. 

An auction centre allows domestic and international buyers to offer their best prices to sellers for the tea of their choice. Sellers also benefit as they can display the products that are in demand in the market. 

Acting director of the National Tea and Coffee Development Board Shesh Kant Gautam said, “Despite efforts to open an auction centre, it has not happened due to policy hurdles and the demands put forward by entrepreneurs.” 

Tea traders want subsidised loans and duty free facility for their products. Entrepreneur Dilli Sapkota said, “It takes at least a month and a half to clear a transaction, so the government should provide subsidised loans for that period.”

Tea traders said that an auction centre would help the industry further as the Nepal Tea logo has been promoted at the international level.

Meanwhile, several farmers and stakeholders have complained that proper discussions were not held to establish the auction centre. 

Aarabi Rai, head of Suryodaya Municipality, said, “Although eastern Ilam is known for tea production and processing, stakeholders like us have not been informed. Plans implemented to serve the interests of organisations or persons will not be sustainable.”

Published: 15-02-2018 08:41

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