Buyers boycott tea auction over minimum price hike in Ctg

A section of local and branded tea buyers boycotted yesterday's (16 June) tea auctions in Chattogram, protesting a recent increase in the minimum auction price. 

This led to the majority of tea remaining unsold at the international tea auction center. 

In response, the Tea Board is scheduled to meet with representatives of buyer organisations today (17 June) to review the situation and address the new minimum auction price.

Mohammad Yusuf, vice president of the Tea Traders Association of Bangladesh (TTAB), said numerous buyer organisations boycotted the auction in protest of the price hike. 

He stated that today's meeting between the Tea Board and buyer institutions is crucial, and active participation in future auctions will increase if the minimum auction price is reduced.

Buyer organisations contend that despite various government initiatives aimed at supporting tea gardens, including an 89% import duty, low-interest loans, and rations, the country's tea sector is facing an escalating crisis due to "sick gardens." 

They argue that instead of focusing on the recovery of these struggling gardens, the minimum auction price is being raised annually. 

Buyers claim this disincentivises gardens from improving quality and increasing production, even with the provided facilities. 

They further assert that the Tea Board's alteration of the basic auction method to increase the minimum price will burden domestic tea consumers and result in substantial losses for buyer organizations that have made significant investments.

Tea brokers reported that while Auction No. 6 commenced yesterday after Eid, most buyers halted their purchases. Although the boycott was a protest against the Tea Board's minimum auction price change, some branded companies did make limited purchases. 

Ultimately, brokers were compelled to withdraw 52% of the tea from the auction by the end of the day, a stark contrast to the 75% sales rate in Auction No. 5 held before Eid. 

Several buyers also complained that some tea was sold at reduced "liquor ratings" late in the afternoon due to the auction price constraints.

According to Tea Board documents, the minimum auction price for tea in post-Eid auctions has been raised by Tk10 to Tk85 per kilogram, depending on the liquor rating. This new system requires brokers to rate the tea's liquor rating across seven grades after it is delivered from the gardens.