ITC to launch first online coffee
auction
Raghu Krishnan
ITC will be launching in mid-January the
country’s first online auction for coffee, called tradersnet. Ninad Bhosle, vice
president, exports, for ITC’s international business division (IBD), told ET here on
Monday that the software for the online auction had been developed and is currently being
tested for reliability by internationally renowned experts. For those cultivators who did
not have computers but who wanted to avail of tradersnet for online trading of coffee in
the spot market, ITC had already created the infrastructure through 72 kiosks in the
coffee-growing heartland in remote areas like Chethalli, Amathi, Gonikoppa, Balehonnur and
Koppa, Mr. Bhosle said. These kiosks had been set up when ITC had two years ago launched
plantersnet.com, its information network which gave international coffee prices on a real
time basis. ITC’s IBD expected to have 100 kiosks in place by January.
"We are," Mr. Bhosle said,
"looking at transacting 10,000 tonnes of physical coffee of the 2002-03 crop on
tradersnet in the first year." He declined to comment when asked about medium and
long-term targets. All he would say was that ITC IBD’s trading of soya in Madhya
Pradesh had been such a success that there were now 3,000 kiosks in that state. "We
could," he said, "be looking at 1,000 kiosks for coffee trading in Karnataka
over the next few years. The main source of revenue for tradersnet will be transaction
fees equivalent to 0.5-1% of the value and charged from the seller in the case of planters
selling consignment coffee in the curing works."
Making a presentation at a technical
conference organised by the Karnataka Planters’ Association and the United
Planters’ Association of Southern India (Upasi), ITC IBD manager Shobana Vaidyanathan
said tradersnet will provide the first auction system for raw coffee and not just clean
coffee. The tradersnet will provide four trading mechanisms, he said.
The first will be the standard auction
where the tick size, payment and delivery rules will be the same for buyers and sellers.
The second will be direct trade, where participants listed their coffees with details like
price, and the buyers could click on the listings which interested them. The third will be
through negotiations, where participants could define the rules. The third was a special
auction for special coffees, and where buyers could post entries for reverse auctions.
Finally, a negotiation mechanism will allow participants to define rules. To cover default
risks, tradersnet collected a margin of 10% of the value up to which a party wished to
trade. An arbitration panel comprising prominent members of trade will be set up.
