Tea Auction

The tea auction system, established by the British East India Company in the 19th century, remains the primary price-discovery mechanism for commodity tea. The process follows a standardized cycle: tea factories send samples to the auction center, where licensed tea tasters evaluate and catalog each lot by grade, origin, season, and quality. Brokers compile catalogs distributed to registered buyers (blending companies, exporters, packers) who taste the samples and submit sealed or open bids. Mombasa handles over 400 million kilograms annually, making it the world's largest auction by volume, primarily trading Kenyan and East African CTC teas. Colombo focuses on Ceylon teas, while Kolkata handles Darjeeling and other North Indian production. The auction price for standard CTC teas often serves as a benchmark for global tea pricing. However, the auction system has critics who argue it prioritizes bulk commodity over quality and depresses prices paid to small growers. In response, specialty teas are increasingly sold through direct trade, private negotiation, or online platforms that connect producers directly with buyers. Despite this shift, auctions continue to process the majority of the world's commercial tea trade.