The Ministry and Commerce and Industry has made it mandatory for dust grades of tea produced in India to be sold through public auctions.
A gazette notification by the Ministry on February 23 also said that at least 50% of other grades of tea – orthodox and the granular CTC (crush, tear, and curl) primarily – should reach the markets through the auction route.
“Every registered tea manufacturer shall, on and from the date of commencement of the Tea (Marketing) Control (Amendment) Order, 2024, sell (i) not less than fifty per cent of total tea manufactured in a calendar year... and (ii) one hundred per cent of dust grades tea manufactured in a calendar year in its manufacturing units... through public tea auctions, held under the control of organiser of tea auction licensed to do so under this order,” the notification read.
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Barring mini tea factories, the order is applicable for tea manufacturing units in Arunachal Pradesh, Assam, Bihar, Himachal Pradesh, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, and West Bengal.
‘Fair price discovery’
The Tea Association of India (TAI), one of the major bodies of planters and tea producers, said it had been advocating the adoption of the public auction as a single sales channel to ensure “fair price discovery” for the beverage industry “facing unprecedented challenges and is on the verge of collapse”.
Many estates bypass the tea auction centres and go for direct selling, where buyers dictate the prices.
“The proposal for a 100% auction commencing with only dust grades was put forward (by tea associations). Transitioning to 100% auction for dust grades represents a small yet significant step towards restructuring the existing system,” TAI president Sandeep Singhania said.
Dust grades are the cheapest teas and constitute approximately 20% of the total tea production in North India (covering West Bengal and the Northeast too).
“We understand that implementing such changes comes with uncertainties and challenges. However, given the urgency of the situation, we believe it is necessary to test innovative solutions with full support for one season and assess their effectiveness and potential impact,” Mr. Singhania said.
The TAI is also committed to complying with maximum residue levels (of pesticides) and marketing teas as a healthy beverage, he said.
