Chapter 26 Appendix IX. World Tea Auction Market

Compared with tea trade methods such as cash exchange (cash) trade, bookkeeping trade and barter trade, the auction market is another form of tea trade. At present, nearly half of the world's total tea auctions are black tea, of which CTC tea is the largest, and most auction markets are also for domestic and foreign sales. The auction market has a wide range of transactions and a great choice, which is a major advantage of the auction method.Second, the trading procedures are simple and the circulation is fast.The whole process from harvesting to auction usually only takes about 20 days, and it takes less than a month to receive the payment (a little longer for non-origin auctions and non-in-transit tea auctions), so as to speed up capital turnover and save a lot of manpower and time. A high-efficiency trade method with a high degree of specialization.Third, the information is well-informed, the goods flow smoothly, and the life is not chaotic.The prosperity of auction activities, coupled with the high development of modern communication technology, has brought black tea trade into the track of international integration (even if it is sold in other ways, its price is determined by reference to the auction market).When the demand for a certain grade of tea is strong, the inventory is low, or the production is expected to decrease, the market price will rise, and vice versa.If the auction price in center A is slightly better than that in center B, the seller will switch from B to A. In short, the auction market price, as an information carrier, can really play a guiding role in production and production structure.

In the end, countless buyers and sellers conduct centralized transactions in the auction market of the place of origin through their own brokerage agents, which is beneficial to the prosperity of the tea industry economy in the producing country, and also facilitates them to obtain various data such as production and sales, prices, and taxes from the auction market for tea policy decisions According to etc. (1) Major Tea Auction Markets in the World 1.London Auction Market On January 10, 1839, with the decline of the British East India Company, which almost monopolized the tea trade channels between the East and the West, the world's first free tea auction event appeared in London, and the history of world tea trade opened a new chapter. one page.The expansion of tea consumption in the West, the rise of blending and packaging companies and their branded teas, and the rapid development of South Asian tea-producing areas have stimulated the demand side to pay close attention to the stability of supply and the diversification of quality choices, and to reduce unnecessary intermediate costs. "Exploitation" and "fairness" of transactions; at the same time, the producer also hopes to put the product on the market as quickly as possible and recover the payment as soon as possible.Against this background, the London auction market, which is located in the center of the world's main sales market and reprocessing center, had a golden age that lasted for more than a century.Although with the prosperity of auction centers in Kolkata, Colombo, Mombasa and other production areas, especially after World War II, its status tends to decline (the annual auction volume in recent years is only about 60,000 tons), but it still attracts tea from all over the world. Currently, 14 tea-producing countries provide auction catalogs to it.Due to the wide range of sources of goods, strong representativeness, long-term unified pricing in British pounds, high comparability, and historical reasons, the auction price of this market has always been recognized as the "barometer" of the international black tea market.

In 1982, the London auction market created the method of in-transit tea auction (or called offshore auction). Tea goods can be auctioned in advance without going ashore for storage.Its advantages are: give full play to the strengths of containerization in international trade, speed up the seller's capital turnover, and simplify procedures; the goods can enter the buyer's blending factory immediately when they arrive at the port, and even before they arrive at the port, they are temporarily ordered by the new owner to transfer to any port in the world , thereby avoiding multiple loading and unloading and round-trip transportation.

The in-transit tea auction system is especially welcomed by inland tea-producing countries, such as Malawi, Zimbabwe, and Rwanda. It frees them from the trouble of not being able to control the arrival of tea goods in Hong Kong as scheduled, and brings new opportunities to these countries that are used to selling tea in England. vitality.Although the proportion of offshore auctions is not high at present (accounting for about 15% of the total auction volume in London), and India, a major exporting country, has little interest, but this method at least brings hope to the revival of the London auction market.

(Li Yuanzhang) 2.Indian Auction Market (1) The Calcutta auction market was formally formed in December 1861 and is located in Calcutta, North India. In 1984, the auction volume reached 145,000 tons, accounting for more than 30% of the total auction volume of Indian tea, ranking first in the country.The auction market was originally a vassal of the London market.At the end of the last century, the annual auction volume did not exceed 25,000 tons, and most of them had to be auctioned again after they arrived in the UK.However, it later became an important factor in weakening Britain's control over the world's tea industry, together with auction centers in places such as Colombo. In 1961, India held a celebration for the centenary of the Calcutta auction market, and former Prime Minister Jawaharlal Nehru cut the ribbon in person.

(2) Cochin Auction Market The earliest (April 7, 1947) auction market opened in South India. At the end of the 1970s, it set a record of more than 80,000 tons of auctions per year, and then decreased year by year due to the impact of other auction markets. In recent years, it has reached about 40,000 tons. (3) The Kunoer Auction Market was opened on May 23, 1963, mainly for the auction of side tea. (4) The Goibat Auction Market was established in November 1980. It is located in a mountainous area and plays the role of picking up lost items. (5) Gauhadi Auction Market is an emerging auction center in North India. It is located in Gauhadi, a traditional inland river transshipment center. It was established on September 25, 1970. In the early 1980s, the annual turnover reached more than 70,000 tons.

(6) Siliguri Auction Market was established in October 1976 and is located in North Bengal. In the early 1980s, the annual production variable also reached more than 70,000 tons. (Li Yuanzhang) 3.The Colombo auction market in Sri Lanka was established on July 30, 1883.Unlike India, Sri Lanka’s tea production, sales, and warehousing are highly concentrated in Colombo, and with the strong support of the government, the Colombo Auction Center has almost monopolized the entire tea trade in the country.The auction volume has been the highest in the world for many years: for example, in 1982, it was 180,000 tons (in the same year, the auction volumes of Calcutta, Siliguri, Gauhadi, and London were 120,000, 80,000, 75,000, and 60,000 tons, respectively).

(Li Yuanzhang) 4.Nairobi and Mombasa Auction Markets in Kenya East Africa is an emerging tea-producing area, and the most "veteran" auction market is the Nairobi Auction Market in Kenya, which was opened in November 1956. Afterwards, the focus of the auction industry moved to the coastal city of Mombasa. The market opened on July 14, 1969. With the increase in output and auction volume, on September 9, 1970, an auction market was established in East Africa. In recent years, more than 40% of Kenya’s exported tea was auctioned locally, and about 16% was shipped to London for auction.The rise of the tea industry in East Africa has made auction markets such as Mombasa a star on the African economic stage.

(Li Yuanzhang) 5.One of the other auction markets is the Chittagong Auction Market established on July 16, 1947, which monopolizes all the tea trade in Bangladesh.The second is the Jakarta auction market in Indonesia, which only auctions export tea (accounting for half of the total export black tea).In addition, there is the Singapore Auction Center opened on December 2, 1981. (Li Yuanzhang) (2) Auction method and steps 1.Auctions are held at fixed times and locations throughout the year.For example, London opens on Monday, Jakarta opens on Wednesday, and Kolkata opens on Monday and Tuesday.The auction room in Colombo is located on the second floor of the Sri Lanka Chamber of Commerce. There are two auction rooms for real tea and secondary tea. 300 and 100 people.The auction room is often shaped like a lecture hall in a university, which is convenient for tea buyers or their agents with relatively fixed seats to see the host (usually the seller’s agent) on the auction platform in front of them, and also for the latter to quickly recognize who is on the stage. bid.

(Li Yuanzhang) 2.Before the auction, each agent must sort out and compile all batches of marking information provided by his client (seller) into a catalog of teas to be auctioned.The content includes the specific date of the auction, the name of the manufacturer (often with the same name as the tea garden), production date, product name (such as BOP, BOPF), specification (traditional craft or CTC, LTP craft), number of boxes, gross and net weight of each box, total net weight, Even the packaging specifications (because the specifications of the tea boxes are more standardized, so the codes are often used to indicate), etc., are very detailed, except that there is no price-but when the market is popular, there are also those who indicate the reserve price.Finally, an auction serial number (not tea number) must be assigned to each batch of marks to represent it.At the same time, the seller must provide several kilograms of sample tea to the broker.

After the catalog is printed, the broker must distribute it to the buyers two weeks before the auction day, and at the same time must attach dozens of grams of sample tea.The latter immediately began reviewing each of them one by one, and set an acceptable purchase price range by default. When the scheduled auction day arrives, each tea dealer brings the catalog and sits on the old seats in the auction hall. The agent on the stage listens to the sequential number of the catalog and reads the auction, and the buyers in the audience bid to subscribe. Immediately tap the gavel, indicating that the sale has been finalized to the last bidder.At this time, if someone raises the price, it will not be processed. The auction house is civilized and orderly, and the broker is proficient in operation. He is often accompanied by one or two assistants to operate synchronously and make records for later checking.The auction is extremely fast, with an average of one or two tea samples being auctioned every minute.After one agent finished the auction, the second agent who was named in the auction room immediately came to the stage to preside over the auction, and the last one left after the auction. (Li Yuanzhang) 3.After the agent returns home, he immediately conducts checks and computer statistics, and after calling the buyers to check the numbers are correct, he will issue an auction invoice to them, which is the transaction certificate. The buyer should immediately prepay a small part of the purchase price to the broker, and the balance must be paid within 14 days at the latest.Afterwards, the broker handles relevant matters with the seller, such as informing the seller to ship the tea directly to the place designated by the buyer. (Li Yuanzhang) 4.After the buyer picks up the goods, the sample will be re-evaluated. If the quality of the sample does not match the transaction, the buyer can negotiate with the broker. It must be noted that auction participants must have certain qualifications.For example, in Colombo, you must be a member of the Tea Association, pay a certain fee to the government every year and have a business license.There are only 7 brokers approved by the government in this auction center.Other auction centers also have restrictions on the number of brokers.Producers (sellers) are free to choose brokers to represent auctions, which are generally relatively fixed.Buyers generally do not pay brokerage fees, but often have to pay service fees to the auction center or units that provide services for the center based on the transaction value. Participating buyers, agents or semicolons of multi-line distribution area distributors or foreign importers in the place of origin.For example, agents from Britain, the United States, Australia, Singapore and even Nordic countries often participate in the Jakarta auction room. (Li Yuanzhang)