Page last updated at 11:21 GMT, Tuesday, 6 February 2007

Tea and technology mix in Calcutta

Tea picking
Tea growing in India is a major industry

Calcutta may be famous for its black hole, grinding poverty and racetrack, but the former Indian capital was, during British rule the centre for India's exports, particularly tea.

Now the way in which this commodity is bought and sold is changing due to the influence of modern digital technology, in particular online auctions.

Digital Planet producer Julian Siddle was given a tour of the old and new style tea auction when the programme visited Calcutta for the India Rising season.

Nilhat house translates as Indigo Market house, an appropriate name for the home of one of Calcutta's oldest businesses. It was here that an enterprising Welshman set up an auction house in 1778. At the time it did a lucrative trade in spices, indigo and jute, then in 1861 the J Thomas company conducted Indians first tea auction.

Today it sells more tea than any other company in the world. The chances are that your daily cuppa passed though the building's colonial doorways.

The way the tea is auctioned has changed little in over 100 years. The tea buyers sit in a circular tiered room rather like a lecture theatre. In the centre of the room an auctioneer rattles through the list of teas. Printed catalogues give a brief summary of the lots, everything from fine leaves of Darjeeling to tea dust.

Sale flowing

Kieran Desai from Tata tea, the company which owns Tetley, says: "The buyers sit in about eight rows deep.

"Somebody says 'up', another just taps a pencil and it's the auctioneers job to notice this and keep the sale flowing. They need to sell at about three lots a minute if the sale is to finish on time."

The board room of J Thomas is lined with photographs of generations of the family, many sporting the traditional garb of the Victorian colonial, pith helmet and walrus moustache. Here tea is served in traditional bone china, milk is optional though, frowned upon for the better grades of light delicate tea.

Amit Chowdhuri is the current managing director and is charged with seeing in a technological revolution.

'Transparent system'

"The auction is a good system and so has remained unchanged. It's the most transparent system.

"We're not against e-auctions; we welcome this, we feel we have to move with the times and if there's something better, why not?"

They are the first participants in a market for online services such as electronic auctions which may eventually reach a wider public
Manish Mathur

Laptops in the auction room now allow up to date monitoring of tea prices and instant comparisons with previous rates.

Many don't like the idea of technology coming along, taking away the eye contact, the adrenalin rush, the cut and thrust.

Kieran Desai sees technology as killing off all the fun of the auction.

"An auction is a bit like a football game so much is going on. It will become like a funeral parlour, everyone will have a laptop, they'll put in their bids and that's it, there will be no verbal communication."

In the ancient tea tasting room a few floors up from the auction chamber thousands of teas are laid out.

Senior taster

Tested for taste and appearance they are graded before appearing in the auction catalogue. The large buckets of spat out tea atest to at least one part of the process which cannot be taken over by the computer.

The senior taster Krisha Katyal with tongue firmly in cheek looks forward to the day when the human taste bud can be mimicked electronically.

Ultimately tea is not drunk by computers, machines and the internet, so it needs a synergetic palette to identify what is preferable
Senior taster Krisha Katyal

"Ultimately tea is not drunk by computers, machines and the internet, so it needs a synergetic palette to identify what is preferable. There is a big move on to develop an electronic tongue and if they can do that, that's great as it will give us a little more time to play golf and other sundry activities."

Internet auctions are very much part of big business in India. Metal Junction, a subsidiary of the giant Tata conglomerate, is the countrty's largest e-commerce company. They too are involved in online auctions, selling mainly to businesses, dealing in steel, coal and recently cars.

The managing director Viresh Oberoi says Indian technological advance is moving on a pace, missing out all the intermediate stages that the industrialised world has gone through.

"We seem to be leapfrogging; there are a number of developments the West has been though which we seem to be skipping.

Auction process

"We've gone from you need to go to the shop yourself to ordering something over the internet, without the in-between stages such as mail order."

Their auction process though is far removed from eBay.

Manish Mathur, the operations manger who watches each sale and intervenes if necessary, says: "Our auctions are a business to business event, with 12 people competing on our website.

"We can get in touch with them individually and say the auction starts now. That means I don't have to run my auctions so long. My auctions last two to three hours.

"The finishing time is open ended. If there is a bid in the last three minutes the auction will automatically extend, the idea is that no one can say I didn't have enough time to bid."

This makes sense in markets like India as the internet, while growing all the time, is not reaching the masses, business users however have connectivity even if its not reliable all the time.

"They are the first participants in a market for online services such as electronic auctions which may eventually reach a wider public," says Mr Mathur

For its part Tata - which recently bought at auction the British steel company Corus - sees online business as essential to its expansion. They are currently planning to produce a "people's car" for India.

With a planned 100,000 rupee price tag (US $2,270 or £1,152) the car may well be initially sold only online to help keep its costs down.

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