"Musings of Gaurav Dhanani on Tea Auction "

Visit to TEA AUCTION – IIFT TRADE CLUB MEMBERS ----31st July 2007

Early in the morning around 7 am we started our journey to the TEA BOARD AUCTION near Dalhousie from respected hostels. My first impression about the event was that it would be a boring one and as seen in the movies and heard by peers.
However it was just the opposite of the impression I had in mind.

As we reached the auditorium we were seated in the last 2 rows and were instructed not to make any kind of noise because it could hamper the auction process. Then the AUCTION process started. There were 3 people sitting in front who were conducting the auction process i.e. the auctioneers and on the other side of the desk were around 70 people, i.e. the BIDDERS who included the high profile tea sellers like TATA , Hindustan Unilever Limited, DUNCANS, GOKUL, PREMIER group, OMKARA, JAGGU, KESARIA group, BALA group, MKL group, TEWARI group. The interesting part of the auction was the behaviour of the bidders and the auctioneer.

The process

Tea is sold in lots with each lot being given a unique number and there was a price associated with each lot and details of the lots like the quantity and approximate price was already with the bidders. The bidders can take the whole of a lot or can divide among the bidders at the settlement price if required. Then the bidders have to take the physical delivery of the tea lots as per their bidding. Once the auctioneer banged the hammer on the table the lot was finalised and nothing was to be done regarding that lot any more.

PARTIES IN THE PROCESS

1-The AUCTIONEER, we had the privilege of seeing 2 of them, the 1st one for 7 minutes and the next one for around an hour. Certain characteristics of the same were: he was a very fast speaker with ears of precision. He was the one who was interacting with the bidders and writing down the orders as per the price settled of the lot and then banging the hammer on the table. The best part was that he was able to identify which company had bid at the instant second, as for a single company 2-3 representatives were present who were sitting in different parts of the auditorium and he was pushing the bidders to offer better price. And one thing that strikes out was that in such fast hue and cry he was able to make jokes..(It was outstanding).

2-The BIDDERS, who were around 60-70 present that day, were the real ones to make note of and be analysed. One feature which I noticed was that 3-4 people of an organisation were present but were not sitting together, actually in different parts of the auditorium. They had code words like a typical shriek and making different kinds of noises which were tough to crack. They had all the required information of the lots and accordingly they were bidding. They were also making notes of the party and the rate at which the lots were sold.

Overall it was a great experience and it was the first time I saw a live auction been held. We were there for around and hour in the auditorium during which around 300 lots were sold, obviously not all lots were sold, for some bidders were not interested. Staying in Kolkata for last 22 years, I haven’t got such an opportunity as this one which I have got after joining IIFT. After it we along with some of the seniors went to Victoria memorial and thereafter returned to respected hostels.

GAURAV DHANANI
MBA IB 2007-09
IIFT KOLKATA