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New tea order stirs bitter brew

Calcutta, Jan. 9: Tea sales have dried up in the heat of a decision by the National Tea Auction Buyers Committee to stop private deals from all auction centres until a widely disliked marketing manual is canned.

The apex body went on the war-path after the government said purchasers must abide by the Tea Marketing Control Order (TMCO), 2003. Angry buyers are now thinking of challenging the statute in a court of law.

Addressing a press conference here today, Inder Singhee, convenor of the committee said: “Tea auctions at Siliguri have already stopped. We have decided to stop delivery, transportation and warehousing facilities, so that private sales can be choked off. Several associations have decided to support us. We have already been abstaining from auctions. Private sales will also be halted from January 18.”

Buyers at Calcutta, Guwahati and Siliguri auctions have closed ranks and suspended purchases. “A similar decision is expected from buyers in south India,” Singhee said.

Reacting to the decision taken by the auction buyers, Indian Tea Association Bharat Bajoria said: “If tea sales through auctions and private channels are stopped, it will be a major loss of revenue for the industry. In such a scenario, we will approach banks to bail us out.”

Earlier in the day, additional secretary in the Union commerce ministry, L. V. Saptarishi, said buyers had no choice but to comply with the new TMCO to take part in auctions.

The order requires buyers to register with the Tea Board. Signing up will force them to furnish monthly returns. This is something they have found hard to swallow and, therefore, stayed away auctions this week.

Saptarishi shrugged off the impact of buyers’ boycott, saying it would not affect tea sales in a situation where producers are free to sell their output through private channels. He held meetings with members of the Indian Tea Association, Tea Association of India, FAITTA, exporters and brokers on industry prospects in general, and the TMCO in particular.

On new tea auction rules, Tea Board chairman N. K. Das said: “The new auction rules are extremely transparent. Earlier, the rules used to vary from one auction centre to other. We have been able to bring uniformity and the rules are on a par with international standards. The changes have been brought about based on the recommendations of A. F. Ferguson.”

Saptarishi said he had discussions about the future of the tea industry. “It has been decided that industry should reach a production level of at least 850 million kgs. We will work out a strategy to increase consumption for which I have asked the industry to carry out a survey of the tea consumption pattern. The survey will be ready within six to eight months.”

Upasi welcomes move

The United Planters’ Association of Southern India (Upasi) has welcomed the new TMCO and said it will support the Tea Board in implementing it and the directives thereunder.

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