India Introduces E-auction for Tobacco

Source from:  Tobaccojournal.com 08 Nov 2008 11/11/2008

India's Tobacco Board will inaugurate an electronic auction (e-auction) system on 9 November to regulate sales of Virginia tobacco. In a project initiated along with Bangalore-based Cranes Software International Limited, to develop an e-auction system using wireless Handheld Terminals (HHT), the board envisages all tobacco buyers and board officials to be part of the upcoming wireless tobacco bazaar. "The complete auction process happens on a handheld terminal in a wireless networking environment. Besides buyers and auction officials, these handhelds can be used by classifiers — the board officials in charge of inspecting and evaluating the quality of tobacco bales," explained Asif Mohamed, head of the banking and financial services practice, Cranes Software. After the classifiers use the HHTs to grade the tobacco bales on quality, the action shifts to the auction chambers. The auction stage is started by the auction superintendent using a HHT. The auction superintendent chooses a particular lot for auction and then the message is flashed on HHTs of the buyers assembled. The buyer may then choose to participate in the auction. The system verifies the balance amount from the buyer's bank guarantee and stores it in the HHT for verification. The HHT checks before each activity whether the bank guarantee is sufficient and displays a warning message in case of insufficient funds. The HHT displays to the buyers, the buyer's bid price, the current highest bid and target price set by the buyer in the purchase plan. The HHT allows the buyer to then increment the current highest bid value to place his own bid. "The system can accommodate 5-6 Board officials and about 700 buyers, recording transaction volumes of 1,200-1500 bales (one bale is roughly 100 kg) per platform each day," Mohamed added. The present manual system has been in practice for more than 23 years and is totally manual. It was set up in 1984 to remove the price stranglehold enjoyed by tobacco companies (buyers) on virginia tobacco sales. While the system has empowered buyers, it has not fully empowered growers and also weakened the grower-buyer transactions due to lack of transparency and discrimination. Enditem