Despite its commitment, National Tea and Coffee Development Board (NTCDB) has yet to introduce the system of auctioning off the processed tea in the country.[break]
Though the Indian government has agreed to make arrangement for Nepali producers to take part in auction center at Kolkata, India, where international buyers approach for testing and procurement of tea, it has not materialized.
As a result, tea exporters are selling the Nepali tea in the international market on their individual endeavors. While this enables the buyers enjoy upper hand in the deal, Nepali producers are left to satisfy with pricing lower than what they actually deserve.
“If Nepal could take part in the auction center, Nepali tea will get double the price it is getting at present,” said tea exporter Mukunda Paudel. “In the absence of this, producers are facing difficulty to recoup even the cost price these days.”
Paudel sells the tea at Rs 170 per kg at Kolkata.
According to the businessmen, buyers from third countries visit Nepal to buy tea on personal contacts. “We have to send samples to lure the foreign customers. Only a portion of them approaches us, tastes the tea and place orders,” informed R C Mainali director of Himalayan Shangrila Tea Producers.
Exports made through such personal contacts make only a small portion of the country´s actual tea trade. Most of the Nepali orthodox and cut-twist-curl (CTC) are informally sold through auction in Kolkota. But as Nepali traders cannot directly take part in the auction, they sell it at cheaper rate to the brokers.
“The brokers buy Nepali tea at very cheaper rate and sell it as Indian tea with Indian logo,” informed Hari Timsina, director of Illam Tea Producers.
In India, the traders need to sell 75 percent of their productions through auction. Likewise, 90 percent of production in Sri Lanka and 85 percent in Kenya must be sold through auction.
The government had adopted a plan to develop infrastructure for tea auction in National Tea Policy 2001. But it was never translated into action.
“We have repeatedly requested the government and NTCDB to make provision for opening an auction center, but in vain,” said Kamal Mainali, a tea trader. “Though Nepali tea is getting good market at international level, there is no fixed place for the buyers to place their orders.” If the government introduced auction center, foreign buyers can buy the tea staying at their own place through e-bidding, he added.
NTCDB officials, on the other hand, blame resistance of Darjeeling Planters´ Association for their failure to secure a spot for Nepali tea in Kolkata auction center despite the Indian government and Indian Tea Board´s approval. They even added that producers in Darjeeling are against giving spot for Nepali tea because they fear fierce competition with high-quality Nepali tea in the auction.
As for initiating tea auction in Nepal, NTCDB officials said lack of appropriate law was hindering them from implementing the program. “We need a separate law for establishing tea auction center. Hence, without government´s support the board alone can do nothing in this connection,” said Padam Gajmer, former regional chief of NTCDB.
Currently, Nepal produces around 13.5 million kg of CTC tea and 2 million kg of orthodox tea in 16,420 hectares of land.
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