Guwahati tea auction centre pips Calcutta in sales

Guwahati, Jan. 4: Golden days are back at the Guwahati Tea Auction Centre (GTAC) as it has nudged Calcutta Tea Auction Centre to the second spot.

The GTAC notched up sales of 158.08 million kg tea in 2012, pipping the Calcutta centre, which sold 148.3 million kg.

The 2012 sales, which fetched Rs 2,100 crore, was very close to the highest quantity of tea ever auctioned in Guwahati, which was 159 million kg in 1999-2000.

Sources said the record sales took place primarily because of the reduction in VAT for auction sales announced in last year's budget. The VAT on tea auction sale has been reduced to 0.5 per cent from one per cent and that on sale of tea through private arrangement has been slashed from two per cent to one per cent. The VAT in Calcutta is one per cent on auction sales and four per cent through the private route.

Last year, GTAC sold 136.31 million kg with an average price of Rs 109.99, while the average price this year was Rs 133.76.

"This is certainly good news but will have to work harder to bring more buyers to sell teas through this centre," secretary of GTAC, Jayanta Kakati, told The Telegraph.

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.

Kalyan Sundaram, secretary of Calcutta Tea Traders Association, said that 85 per cent of teas being offered at Calcutta is Assam tea. "The only advantage in Calcutta is that of a large local market."

There has been tough competition between both the auction centres for the top slot, with both trying their best to attract buyers. While the GTAC sells CTC teas primarily, the Calcutta centre, on the other hand, sells Darjeeling and other variety of teas.

The Indian Institute of Management, Shillong, has already been engaged by the GTAC to go into the issues connected with its performance. Sources said the situation could improve further by adopting proper marketing strategies to attract both buyers and sellers with tax benefits for teas sold through the centre. Ideally, 50 per cent of tea produced in Assam should be sold through GTAC and for this the government can pressure the companies to offer their teas at the Guwahati centre.

Kakati said that for the centre to improve, auction sales will have to be more competitive, better teas have to be offered coupled with better storage facilities and quality packaging.

Dinesh Bihani, secretary, Guwahati Tea Auction Buyers' Association, stressed the quality of packing as it contributes in a big way to retaining the quality of the product.

"We all know that teas in general are consumed after a period of two to four months from the date of manufacturing. But unfortunately, the packing of teas in Guwahati has left much to be desired. In most cases, the inner linings are of poor quality. They are not heat-sealed properly, which results in contamination of teas during transit and also increases the moisture content. The quality of materials used in the bags is also matter of great concern," he said.

"There is also concern about the storage system at warehouses in Guwahati. The quality of teas is affected owing to poor infrastructure in the warehouses. The warehouses of GTAC still follow the same 30-40 year old system for storing teas," Bihani said.

A source said of the 158 million kg sold, 122.09 million kg was through auction sales and 35.1 million kg through private sales.