The
king of lots
In
a chat with Shuchi Srivastava, KN Desai, is nostalgic about the traditional
auction rooms but opines that the electronic auction system could prove
to be beneficial
Amock
trial of the recently introduced electronic tea auction system was conducted
at the Tea Board and was attended by representatives of the industry.
TFPJ spoke to Mr Desai, Chairman, Calcutta Tea Traders Association,
a witness to this initiative.
What
were your impressions of the trial run of the electronic auction system?
Basically
I was witness to a mock trial at the Tea Board. I feel that there was
a time lag between when you punch in your bid and the actual reaction
time. It is almost as high as 20 seconds. There are five lots on the
screen at any given time, and bidders are allowed to operate on any
or all of these. There is also a function an auto bid available.
If
an organisation has to bid a certain amount as their initial auto bid
for a particular chest of tea can the company’s representative present
in the auction room change it?
No, it can’t be changed. But the people behind its introduction have
put in a series of locks, which can be operated to change the call but
the bidder stands to loose crucial time. Bidders are allowed to change
their call twice but all these activities are not simultaneous to them
being privy to all the other bids. What happens is that the auction
begins with five lots as I mentioned earlier for which the broker starts
to bid, he is running on a 3-4 minute timer. The organisation that has
put an auto bid of say Rs 80 may be interested in bidding up to that
limit, but might not be necessarily interested in buying at Rs 80. The
screen is open for 3 minutes only, at say 2 minutes and 40 seconds I
put in a bit of Rs 68, the system does not have enough time to come
and tell me the next bid and the person who has used the auto bid option
to bid at Rs 80 will find to her/his dismay that the tea has gone at
Rs 68.
Why
would a buyer who is present at an auction to buy tea at the cheapest
possible price put in an auto bid at all?
The
bidder obviously assumes that s/he is ready to pay a maximum of Rs 80
for a particular lot of tea. S/he takes an average value that s/he thinks
that the actual price would fluctuate around.
How
is it qualitatively different from the traditional auction system?
Traditional
auctioning was live, dynamic and very personal where seasoned bidders
were pitted against each other and were able to make instant judgements
based on years of experience. Bids were raised not only for personal
buying but in order to thwart competitors. This system in comparison
is faceless and very impersonal. The skills of an auctioneer and a buyer
are totally negated.
Who
do you think really stands to benefit from the introduction of this
system?
At
the moment I can’t really make that distinction. If the idea is to give
the seller the best possible price then the introduction of this system
would leave in its wake a series of missed opportunities. If somebody
is registered in a phase where the return bid cannot come through the
seller has automatically lost out on a higher price.
.....CONTD
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