COLOMBO TEA AUCTION

Colombo Tea Auction

The first Tea Auction in Colombo was held on 30th July 1883 in the office of Somerville & Co., down Queen Street now renamed Janadhipathi Mawatha. Prior to this, many tea plantation people shipped Ceylon teas to the London Tea Auction or sometimes directly to overseas buyers. The Auction itself was only modestly successful with only one lot of Kabaragala un-assorted tea selling for cents 45 a pound whereas the other 4 lots remained unsold due to either lack of bids or due to bids received not meeting the Broker’s expectations. Despite debacles, Somerville & Co. and the other brokers persisted and were able to conduct auctions on a regular basis from 1885. In 1894 the Ceylon Chamber of Commerce (CCC) set up the Colombo Tea Traders’ Association to formulate rules for the conduct of the Tea Auction. They promoted the common interest of buyers and sellers in the Colombo market. With modest beginning, Colombo Tea Auction (CTA) grew to be the largest tea auction in the world in terms of the number of lots sold. Mombasa in Kenya has for several years been the largest tea auction in terms of the volume of tea traded. CTA saw many changes over the years meeting changing circumstances. Auctions were originally conducted in the CCC Building in Chatham Street on one day of the week on a regular basis in one auction room. As more and more tea was being sold through the Colombo Tea Auction and the number of lots increased the auction split over to the second day. With the further increase in the number of lots the CCC Board Room was converted into a second auction room. The new CCC building at Nawam Mawatha made provision for two custom built auction rooms, but in the course of time this too proved to be insufficient and today the Colombo Tea Auction is conducted on two days of the week concurrently in three auction rooms. Today with tea factories increasing the number of grades to meet buyer demand the number of lots are correspondingly increasing placing a further strain on the system. As it is an auction on two full days namely Tuesday and Wednesday results in a severe strain on buyers having to taste, grade and evaluate up to 12,000 different lots of tea during the other days of the week, so that they could be prepared to bid for teas at the next week’s auction. Sri Lanka Tea Board and CTTA are now looking at the merits of using modern technology to automate the Colombo Tea Auction and thereby increase efficiency while hopefully bringing down operating costs. The ultimate aim is for the Colombo Tea Auction to be more transparent and less costly to operate thereby increasing competition resulting in a win- win situation for all participants and stakeholders.

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