Tea baron held for bar attack - Brew auction stopped, market closed after arrest

Siliguri, Sept. 2: The chairman of the Siliguri Tea Auction Centre and a businessman were arrested today for allegedly leading a group of people who had attacked a bar with crooners at Sevoke Road yesterday. The STAC chairman, Gangadhar Agarwal, and the owner of a chain of sweet shops, Pradip Bansal, have been charged with theft, assault and mischief and remanded in 14 days’ jail custody. Traders shut down the auction centre and the wholesale grocery market in Khalpara, where Agarwal and Bansal reside, to protest the arrest. Around 40 people carrying Congress flags barged into Rave Up, a bar where singers perform live, and went on the rampage. In his complaint filed with Bhaktinagar police, the owner of the bar, Vijay Sharma, alleged that the attackers had heckled his staff and taken away cash from the counter. “All of them suddenly entered the bar and smashed the furniture. I have no clue why they attacked my bar as only live singing is allowed and there is no question of dance performance to which they were objecting. Two of my employees have suffered injuries as they tried to dissuade the attackers,” said Sharma. Recently, a forum known as Singing Bar Pratibad Mancha had emerged in town with the backing of the Congress. “Our key demand is to stop the practice of singing and dancing in bars. We have been organising a movement in a democratic manner for the past three months and have no connection with yesterday’s incident,” said Jayanta Saha, the joint convener of the Mancha. The office-bearers of the Mancha and bar owners held a meeting on Wednesday and it was decided that there would be no dance performance in any outlet selling liquor in Siliguri. “Regarding live singing, a seven-member committee comprising the representatives of the Mancha and bar owners’ association was formed to look into the issue and decide on timings, dress code of the singers and other issues,” said Saha. He said both Agarwal and Bansal were members of the Mancha and were wrongly implicated in the case. The duo were arrested from their homes. As the news spread, the tea auction came to a halt. “We did not participate in the auctions today to protest against the arrest of the STAC chairman,” said Bajrang Sethia, a senior member of the Siliguri Tea Traders’ Association. Around 100 million kilogram of tea is traded at the centre annually. The auction will resume at 9am tomorrow. Shops downed shutters in Khalpara as both Agarwal and Bansal were from there. “Both are our members and we protest the way they have been falsely named in the case,” said Kailash Agarwal, the secretary of the Siliguri Merchants’ Association. The arrested men were produced in the chief judicial magistrate’s court in Jalpaiguri. The judge, Debabarata Mukherjee, rejected the duo’s bail petitions and ordered 14 days’ jail custody for them. They would be produced in court again on September 16. The North Bengal Musical Bar Owners’ Association has denied the allegation that dance performances are held in their outlets. They said all musical bars would be closed for an indefinite period from today. “We condemn the way a bar here was ransacked without any provocation yesterday,” said Rohon Sarkar, the association’s secretary. “Unless the issue is resolved, we will not open our establishments.” Sources said Darjeeling district Congress president and Matigara-Naxalbari MLA Shankar Malakar would hold a meeting with the bar owners tomorrow. He is known to have backed the Mancha and protested against such bars. The Darjeeling district magistrate, M.K, Gandhi, said the district administration gave permission for only singing in bars. “We don’t allow live dance in bars. Permission is given for live singing with certain conditions.” Source: The Telegraph

Tea strike put on hold

Siliguri, Nov. 18: An impasse that had been continuing over the last week regarding the storage and sampling of tea sold through the Siliguri Tea Auction Centre (STAC) temporarily ended today. The Siliguri Tea Warehousing Association agreed to suspend its agitation for the time being.

Up to one lakh tea bags, from over 200 gardens, holding 35kg of tea each, are stored in the 28 warehouses in Siliguri. The agitation was over the delay to decide on the new rents that the producers and buyers will have to pay for the storage. The revision, which takes place every two year, was scheduled to be done earlier this year.

However, the new rate decided by the warehouse owners has put the buyers and producers on the back foot. They have been holding their own meetings to reach an amicable rate, which is apparently, the reason for the delay.

“We had been compelled to resort to a partial strike since November 11, a day after a cut-off date had been intimated in writing to STAC for calling a meeting to finally decide on the new rates,” said Sandip Sinhal, secretary of the warehousing association.

Although deliveries taken out from the warehouses by buyers had not been affected, the entry of new lots of tea and the sampling of existing lots had stopped completely because of this delay.

However, based on a request from STAC chairman Gangadhar Agarwal, the warehouse association decided to suspend the agitation till November 24, by which time Agarwal has assured that the revised rate of rental would be agreed upon.

“The tea for Sale 48, which will take place on November 27, has arrived. But that of Sale 49, scheduled for December 4, has partially arrived, while that for Sale 50 on December 11 has not arrived at all,” said Col. (retd) T.B. Subba, STAC secretary.

Two full-fledged meetings, at which all the stakeholders were expected to take part, had already been convened in this month. But, both were inconclusive for want of quorum.

“There appears to be a lack of seriousness on the part of STAC,” said Sinhal.

“We had held a token strike on October 30 and had written a letter before that to STAC’s warehousing advisory body, saying we would resort to an indefinite agitation. But the meeting is yet to be held,” he said.

A prominent tea producer and former STAC chairman S.K. Saria pointed out that the warehouse association has demanded a steep 40 per cent increase in the rental.

“At a time when international recession has hit the demand for tea, this hike will affect producers badly,” he said. “We have still held meetings with the association and some agreement will be reached,” Saria said. “Otherwise, sales through the Calcutta and Guwahati centres will be at an advantage, while north Bengal will suffer.”

Instant tea auction to take on private sales

Siliguri, May 8: The Siliguri Tea Auction Centre will introduce instant auctioning by May-end or early June to counter private sale of tea, which accounts for nearly 50 per cent of the production in the region.

In instant auctioning, the cycle of production-sale-payment gets over in two weeks. Experts said this would allow planters to sell tea when the prices are high, as they do in private sales. The entire process through regular auctions takes around six weeks.

“The governing body of the auction centre has passed the decision (about instant auctioning),” said S.K. Saria, the chairman of the Siliguri Tea Auction Committee (Stac). “We are working out the modalities based on suggestions from all sections of the industry. Since it is a new concept, some sections have expressed apprehensions.”

A meeting of the governing body will be called in a day or two before implementing the scheme in “May-end or early June”, Saria said.

The Stac chairman added that instant auctioning would initially be run on a trial basis for a month or two. “It will run alongside regular auction and will be entirely optional.”

Instant auctioning does away with the elaborate sampling process where samples are sent even to buyers on the far end of the supply chain. Now, planters will send 4kg of sample to the broker, who will circulate it to local traders on the basis of which bids will be made. “The sale will be held three days after the samples are issued,” Saria said.

“In the regular system, buyers enjoy a prompt (time by which payment has to be made) of 13 days. In instant auctioning, this will be seven days (see chart). So a planter will get his money within two weeks of bringing the tea for auction, unlike the six weeks in the regular system,” said Anand Agarwal, a seller-member of the governing body.

An incentive of two per cent cash discount will be given to buyers. “They will also have to pay only one per cent value-added tax, compared to four per cent in private sale,” Agarwal added.

Stac hopes that the new system will attract greater volumes of tea. “Currently, most of the good tea is sold through private sales because of the 22-23-day gap from production to sale in the regular system,” Saria said. “A study of Sales 14-20 reveal that prices steadily fall as the season progresses. If a planter is able to sell tea when the graph is high, he can get better prices.”

Bajrang Sethia, a buyer-member of the governing body, said he would reserve his verdict until the trials were over. “We are concerned how trade will fare when buyers in Delhi, Mumbai and Calcutta cannot get to test the samples,” he said.

Brokers are worried about instant and regular auctioning running side by side. “It will increase the workload of the broker, which may cause delays,” M.C. Lohia, a broker-member of Stac, said. But he admitted that because all sales would be institutionalised in instant auctioning, it would bring more transparency in tea trade and give greater financial security to buyers.

Bad roads and a broken bridge affect tea distribution

Over 50 lakh kg of tea ready for distribution is stuck at warehouses in Siliguri after bad roads in Bihar and the broken Bailey bridge in Raiganj disrupted traffic in the region.

S.K. Saria, chairman of Siliguri Tea Auction Committee (Stac), said the situation is likely to have a spiralling effect, ultimately hitting the planters and workers at a time when the industry is trying to cope with the twin effects of low production and price.

“About 50 lakh kg tea auctioned off in the past three weekly sales (Sales 33, 34 and 35) is lying idle in the warehouses,” Saria said. “This means about Rs 40 crore is stuck up at a single point of the supply chain.”

Following requests from buyers to defer tomorrow’s auction at Siliguri Tea Auction Centre, the Stac sales advisory committee held a meeting today. “However, we decided not to let the auction be affected for it will hit the sellers hard,” Saria said. “For the sake of the buyers, the seller members have agreed to increase the ‘prompt’ by two days.”

Prompt in industry terminology stands for the number of days by which the buyers are supposed to pay for the stocks bought at the auction. According to Stac rules, a “prompt” of 13 working days is granted to a buyer for each sale. “The buyers will now get a respite of two days each for the last three sales as well as tomorrow’s sale.”

Saria said Stac has also decided to submit a memorandum to the government on the situation.

Shankar Agarwal, general secretary of Siliguri Road Transporters’ Association, said tea movement has almost come to a standstill. “Since the last one month, the Bihar floods and bad roads resulting out of it have caused a near total halt of movement of trucks to and from north India through Bihar (mainly the seven-eight km stretch in Naugachia),” he said.

“On an average, 100 truckloads of tea move out of Siliguri daily, but now because of the road disruption not a single vehicle is being dispatched,” Agarwal said.

S.K. Bhattacharya, the secretary of Siliguri Tea Traders’ Association, said the buyers were at a loss. “If the primary buyers are unable to deliver tea to up-country buyers, they will not receive payments. On the other hand, they will have to make the necessary payments to the sellers within the prompt period. However, the relaxation in prompt has brought some relief.”

Source: The Telegraph

Siliguri Tea Auction sales crop down

Major corporate buyers of tea are shying away from the Siliguri Tea Auction Centre, resulting in a slump in volume of sale and price of tea produced in the Dooars.

For reasons variously interpreted and explained, cumulative buying by big players like Hindustan Unilever Ltd (formerly Hindustan Lever Ltd), Duncans, Eveready and Godfrey Phillips India Ltd has registered a sharp fall in recent times.

A look at the figures available with the centre shows that Hindustan Unilever, which used to buy the lion’s share of the auction centre’s tea, has reduced its purchase by more than three times between 1999-2000 and 2006-2007.

Industry sources said the FMCG major did not lift any tea from the Siliguri auction centre in the first quarter of this financial year. “This month, they have made a few purchases, but that is negligible compared to the amounts they used to buy about a decade ago,” a Siliguri-based broker said.

“Hindustan Unilever and other institutional buyers form our core business,” said S.K. Saria, chairman, Siliguri Tea Auction Committee (Stac). “It definitely is a setback for us when they do not participate in the auctions. Pricing of tea is affected the most because their presence helps prices go up.”

Former Stac chairman Ravi Agarwal, who is a member of the Siliguri Tea Traders’ Association, said in the absence of the big players, other buyers, too, are sticking to a wait-and-watch policy, hoping for prices to fall further. “They are buying only the tea that is strictly on demand and are not stocking up,” he added.

Figures show that after average price of tea touched a high of Rs 71.42 per kg in 1999-2000, it has remained around Rs 60 per kg for most of the intervening period, finishing at Rs 64.78 per kg in 2006-07. Total sale through auction has also remained more or less the same, despite an increase in tea production.

No one is quite sure why the Big Four are steering clear of the Siliguri auction centre. Some industry sources claim that there has been a decrease in the market share of these companies, while other say the big players are sourcing their tea from the Guwahati and Calcutta centres.

P.K. Bhattacharya, secretary, Dooars Branch of the Indian Tea Association, said it is not unlikely that the institutional buyers are resorting to private, or out of auction, sale.

Industry sources here said they are not in favour of private sales because in that case planters are less likely to get the best price for their tea.

M.C. Lohia, from the senior management of Tea Champagne, said competition from local entrepreneurs could be one reason. “Of late, there has been a surge in the number of local blenders who have launched their own brands,” he said. “They are eating into the market share of the larger companies.”

A spokesperson for Hindustan Unilever, however, said this was not so. “Since small and big players operate in different markets, there is little chance of one impacting the other,” he said over phone.

About sourcing, the spokesperson wrote to The Telegraph in an email that the company uses “all the available marketing channels, which include auction centres”. He said the company’s sourcing strategy takes into account “consumer preferences across domestic and export markets, blend recipes and the mix of (Unilever’s) portfolio”.

However, the spokesperson refused to divulge any details about the amount of tea Hindustan Unilever procures from different sources.

Source: The Telegraph

Tax cut on Siliguri Tea Auction

The Bengal government has reduced Central Sales Tax (CST) at the Siliguri Tea Auction Centre, but refused to grant a complete waiver.

“The state government has now fixed the CST at one per cent instead of the earlier two per cent with retrospective effect from April 1, 2007,” S.K. Saria, the chairman of the Siliguri Tea Auction Committee, told today.

“After North Bengal Tea Auction Centre in Jalpaiguri was granted a complete waiver of CST last April, we requested the government for a similar waiver at our centre,” Saria said. He added that the reduction would encourage more buyers from outside the state to buy tea from the Siliguri auction centre.

Industry experts believe the reduction will encourage above the board trading with proper documents. Traders are said to resort to trading on the sly to evade CST.

Source: The Telegraph