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Tea centre gasps for survival

- Members leave Jalpaiguri trade hub as flow of brew comes down

Aug. 24: The North Bengal Tea Auction Centre in Jalpaiguri is caught in a vicious circle of depletion of the produce and desertion of sellers, buyers and brokers.

The tea going under the hammer at the centre came down from around 30,000kg at the beginning of the current fiscal to 4,460kg on August 20, forcing the authorities to postpone the auction scheduled for August 26 indefinitely.

The centre that opened in 2005 stopped the auction in 2009 following a sharp decline in the volume of commodity put up for sale. The auction resumed in 2012 after a hiatus of two-and-a-half years with bought-leaf factories agreeing to sell the produce through the centre. “The auction scheduled for August 26 has to be postponed because of less inflow of tea. Planters and BLFs are not sending tea regularly and auctions had to be cancelled many times ever since the centre reopened in 2012. This has prompted some buyers and brokers to abstain from the trade. In a reverse effect, the producers abstain from the auction because of less number of buyers,” said a source at the centre.

Sellers, buyers and brokers are the members of the centre and many of them haven’t renewed the membership this financial year. The number of participants in the auction came down drastically, from over 200 in 2012-13 to just 54 this year.

In the 2012-13 fiscal, 2.78 million kg tea was sold at the Jalpaiguri centre. In total, 67 sellers, 168 buyers and six brokers had participated in auctions then. “However, the sale came down to just 7.12 lakh kg in 2013-14, which also led to a reduction in number of participants. Unlike 2012-13, only 33 sellers, 102 buyers and five brokers took part in auctions in 2013-14. Only 54 people have renewed their membership in the current fiscal,” said another official at the centre.

In the current financial year, only eight auctions have been held so far. The inflow of tea was around 30,000kg for each of the first three auctions this year. However, the quantity came down subsequently and only 4,460kg of brew was put on sale yesterday.

Stakeholders of the tea industry pointed out that sellers, buyers and brokers were banking on the Siliguri tea auction centre, where over 100 million kg of produce had gone on the block in the last fiscal.

Purojit Bakshi Gupta, the vice-chairman of NBTAC, has said the situation is grim. “It is true that a section of stakeholders has not renewed membership. This is primarily because of less inflow of tea. However, we are not ready to relent and would continue to strive for sustenance of the auction centre. Talks are in progress with the government for a waiver of VAT for tea sold through this centre. If the state announces this waiver, the inflow of tea would increase.”

VAT is charged at the rate of one per cent on tea sold through auctions.