Sri Lanka: tea auction transformed
For many, Sri Lanka (formerly known as Ceylon) and Ceylon tea are synonymous. The country’s economy and society are deeply intertwined with the majestic tea leaf. Today, 10 percent of Sri Lankans derive an income from the tea industry, which generated more than $1.2 billion in export revenues in 2020.
For more than 125 years, the tea industry has depended on a tradition-steeped auction where hundreds have convened twice a week at the Ceylon Chamber of Commerce to buy and sell Sri Lanka’s finest leaves.
When COVID hit, the world’s oldest tea auction, which had functioned without fail for more than a century, was suddenly unable to bring together buyers and brokers for the weekly bidding. Plantations and factories had nowhere to sell their product, buyers were left in a lurch, and millions were at risk of losing their income.
Sri Lanka’s tea auction faced an urgent need to reinvent itself.
“The whole country said, right—now there’s 2 million people whose lives depend on this industry . . . we need to look after them,” says Anil Cooke, CEO of Asia Siyaka Commodities, who led the task force charged with digitalizing the auction.
With brokers and buyers unable to meet in person, the challenge was not just to find an alternative to the live auction, but to get it up and running and yielding good prices—immediately.
Sri Lanka’s tea industry had been mulling a switch to a digital auction for more than 20 years. But the auction’s nuanced dynamics—which drew on an innate knowledge of complex tea blends, frenetic in-person competition to draw top bids, and real-time market feedback—had stymied previous attempts.
With the stakes as high as ever, a team comprising the Sri Lanka Tea Board, technical experts, the government, brokers, auctioneers, and others came together to find a solution.
Local IT company CICRA Holdings led technical development, working with brokers trained to interpret the dynamics of in-person bidding and with deep knowledge of tea categories and grades. To succeed, the e-platform would have to reimagine all the human and technical variables of the live auction.
Within days, some 300 people had taken part in simulated training programs, with sessions running up to the night before the launch.
“I am happy to say that within a very short period of time, about seven days, we managed to build a solution . . . [and] made history on April 4, 2020, by having the first digital auction going live,” says Boshan Dayaratne, CEO of CICRA.
Not only is the new system COVID-safe, it’s also faster, more strategic, and cost-effective—and even yields higher prices. The online auction has also improved transparency and efficiency and reduced duplication of work.
Benefits are being felt locally as well. D. Gayan, supervisor of the Dessford Tea Estate, says the continuity of sales has enabled them to continue operations and pay workers.
A. Rajakumari, a “plucker” who harvests tea by hand, says that “even though we had a virus last year, those of us in the estate got our salaries. It’s because of this work that, even during the corona problem, I was able to happily run the home and live comfortably with our children.”
