What an auction is actually for
An auction solves a specific problem: how do you set a price for a heterogeneous, non-standardised good produced by many sellers and wanted by many buyers, when no two lots are identical and quality can only be judged by tasting? Tea cannot be traded like wheat, because there is no meaningful single grade that a contract can reference. The auction handles this by making the LOT the unit — a defined quantity of one grade from one factory’s single day or few days of manufacture — and by giving every registered buyer the chance to taste that exact lot before bidding. Price is then discovered publicly, lot by lot, week by week. The auction also does something less obvious and equally important: it creates a visible reference price for a whole producing region, which every private contract in that region is then negotiated against. That reference function is worth dwelling on, because it is the reason an auction can matter far beyond the volume that passes through it. A private contract has to be priced against something, and in the absence of a public market the only available anchors are last year’s deal and the buyer’s assertion about what tea is worth. A weekly published sale gives both parties an independent number to argue from, which changes the character of every negotiation in the region whether or not either party ever bids.
Cataloguing a lot
Before a sale, the producer consigns tea to a broker. The broker records the factory or garden of origin, the grade, the invoice number, the number of packages and the net quantity, and assigns the lot a catalogue number and a place in a sale order. Grades matter here in a way they do not on a shop shelf: a CTC catalogue distinguishes brokens, fannings and dust in a defined descending particle order, and an orthodox catalogue uses the leaf-grade abbreviations that so confuse retail buyers. The catalogue is circulated in advance, and with it go samples — a small quantity drawn from each lot and sent to every buyer who wants one. The catalogue entry is a promise about identity; the sample is the evidence. Everything else in the system rests on the sample being honestly drawn and genuinely representative of the bulk. That is not a trivial condition. A lot is many packages made over a production run, and the tea in them is not perfectly uniform; the sampling protocol — how many packages are opened, from where in the stack, how the drawn material is combined — is what makes the sample stand for the whole. Where a delivered bulk disappoints against the sample the buyer bought on, the broker’s rules provide for a claim, and a producer with a record of such claims finds it in their prices long afterwards.
The tasting room
In the days before a sale, buyers’ tasters work through hundreds of samples on a long bench. Each is brewed to a fixed protocol — a set leaf quantity, boiling water, a standard steeping time, a standard pot and bowl — because comparability matters more than optimality. The dry leaf, the infused leaf and the liquor are all assessed, usually with milk for CTC destined for a milk-drinking market, because that is how it will be consumed. The taster is not looking for a beautiful cup. They are looking for whether a lot fits a BLEND SPECIFICATION: has it the colour, briskness and body to stand in for the lot the recipe used last month, at what price, and how much of it is there. This is the reason auction tasting and speciality tasting sound like different crafts. They are answering different questions. The vocabulary reflects it. Auction tasting notes are short, functional and comparative — brisk, coloury, thin, harsh, plain, tippy — and they exist to place a lot on a scale rather than to describe an experience. A speciality note reaches for aroma, texture and development across infusions, because its job is to persuade someone to want this tea in particular. Neither vocabulary translates well into the other, and a good deal of confusion in writing about tea comes from borrowing terms from one context and using them in the other.
The sale
Attested in the historical record, and sourced to it.
Sales run weekly or fortnightly in season, lot by lot in catalogue order, at speed. Bidding may be by open outcry in a sale room or, increasingly, through an electronic platform that has replaced or supplemented the room without changing the underlying mechanism. A lot that does not reach the seller’s reserve is withdrawn and usually re-offered in a later sale, which is an important pressure: a producer holding withdrawn tea is carrying inventory and financing cost, and tea does not improve while it waits. After the sale the broker handles invoicing, delivery orders on the warehouse, and payment to the producer on a published settlement timetable. That reliable settlement is a large part of why producers use brokers at all. The speed of the sale is itself informative. A room working through hundreds of lots in a session cannot deliberate over any of them, which is only possible because the deliberation already happened in the tasting room during the preceding days. By the time a lot is called, each buyer knows what they will pay for it and why. What the sale room adds is not judgement but competition — the discovery of which buyer’s valuation is highest, in public, on a timetable everyone can plan around. How much tea fails to clear is measurable in at least one centre. The Tea Board of Kenya reports 723 million kilograms of made tea offered and re-offered at the Mombasa auction during 2024 against 382 million kilograms sold, which the Board reports as 55 percent absorption, down from 60 percent the year before. The offered figure exceeds the whole of Kenya’s national crop for the year, because a lot withdrawn at one sale and offered again at the next is counted both times — which is the pressure described above, expressed as a number.
The main centres, and what each is known for
Mombasa is the principal auction for East African tea, handling Kenyan production alongside tea from neighbouring producers, and is the reference point for bright, coloury CTC. Colombo is Sri Lanka’s auction and is unusual in that essentially the whole national crop passes through it, sold by elevation categories that the market regards as meaningful. In India, Kolkata and Guwahati serve the north-eastern crop — Assam, the Dooars, Darjeeling — with further centres including Coonoor and Coimbatore in the south. Chittagong serves Bangladesh, and Jakarta has served Indonesian production. Each has its own rules, currencies of settlement and buying community, and prices at one are not directly comparable with prices at another. TeaHQ has not retrieved current volumes or shares for any of these centres and does not state them. What the list does show is a geography. Every one of these centres sits at a port or a rail head serving a producing hinterland, because the auction system was built to assemble a dispersed crop and load it onto a ship. That origin explains an oddity of the modern trade: tea from a landlocked or newly established producing country often has no auction of its own and is sold either privately or into a neighbouring country’s sale, which puts it at one remove from the price its own crop makes.
Why direct sale coexists with the auction
Auctions suit undifferentiated tea sold on tasting merit. They suit it badly when a buyer wants something specific and repeatable: an organic-certified lot, a documented-origin lot for a traceability programme, a particular garden’s first flush, or a supply commitment across a season at an agreed price. Direct contracts also let a producer capture the broker’s commission and let a buyer lock in supply, at the cost of taking on the risks the auction had socialised — quality disputes, credit, and the loss of a public price to argue against. Many producers do both, sending routine grades to auction and negotiating their distinctive lots privately. The result is a market with a visible reference price and a large volume of trade that references it without passing through it. There is a well-known instability in that arrangement. The public price is a common good produced by the lots that are offered, and every seller who withdraws to a private contract makes the remaining sale slightly thinner and its price slightly less informative. If enough of the good tea leaves, the auction becomes a residual market for what nobody wanted privately, and its average stops meaning what it used to. This is why auction organisers and tea boards in several countries have argued for minimum proportions of the crop to be offered publicly.
What an auction price does and does not mean
An auction price is the price of one lot, at one sale, in one currency, for tea already delivered to a warehouse in the auction centre. It is not a farmgate price, and the difference between the two — transport, manufacture, the factory’s margin, brokerage, warehousing — is exactly the part of the chain a grower does not see. It is also a spot price with no forward curve: it says what buyers paid this week for tea that already exists, not what they will pay next season. Averages published for an auction centre mix grades and qualities and can move because the composition of what was offered changed rather than because the market did. Reading an average as a statement about grower incomes is the most common error made with these figures. A related trap is comparing across centres. Prices at different auctions are quoted in different currencies, for different grades, under different delivery terms and against different local costs, so a higher number at one centre than another says almost nothing about which producers are better off. Even within one centre, a comparison across years has to contend with currency movement and inflation. Anyone reading an auction average as a barometer of an industry’s health should first ask what was in the catalogue, and in what money.
What this page does not claim
It gives no prices, no shares of world trade and no ranking of auction centres by size, because such figures move continuously and TeaHQ has not verified any of them against a primary dataset. The one set of volumes it does give — offered, sold and absorbed at Mombasa — is the Tea Board of Kenya’s own annual return and is stated as such; there is no equivalent figure here for Colombo, Kolkata, Guwahati or Chittagong, and nothing about Mombasa’s clearance should be read across to them. It does not state which centres are currently operating on electronic platforms, since that has changed repeatedly. Auction rules are set by the associations that run each centre and are amended regularly; the description above is of the general mechanism, not of any centre’s current rulebook, and a reader needing the actual rules should go to the relevant tea board or auction organiser rather than to this page. It also does not claim that all tea in the named countries passes through their auctions, or that any producer is obliged to use one — the balance between auction and private sale differs by country and by year and is itself a policy question in several producing states. Finally, nothing here evaluates whether the auction system serves producers well. That is a genuine and unresolved argument within the industry, and this page describes the mechanism so that a reader can follow the argument rather than settling it.