iTTS software to automate the Auction Process of EATTA

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We are delighted to inform you that Eastern Software Systems in collaboration with CSM Technologies have delivered the Integrated Tea Trading System (ITTS) to East African Tea Trade Association (EATTA). This marque project is being launched at Mombasa, Kenya on 31st March, 2022. This project has the potential to change Tea Trading ecology in East Africa. We would also like to highlight that Kenya's most valuable agricultural export is tea. Kenya is the largest exporter of tea in the world accounting for 22% of the total world tea exports. Tea industry contributes around 4% of the country's GDP and 26% of the country's export earnings.

East African Tea Trade Association (EATTA) is an organization bringing together Tea Producers, Buyers (Exporters), Brokers, Tea Packers and Warehouses, all working to promote the best interests of the Tea Trade in Africa. Currently, membership comprises over three hundred companies extending across the East and Central African borders. EATTA mandated to promote and facilitate the interests of all the stakeholders in the tea trade in Africa by creating an enabling business environment geared towards maintaining global standards and delivering tea products to the customers in the most profitable way.

The automation was in a view of enhancing efficiency with which teas are sold through the auction. Developed over 3 years, the first sale went live on 27th May 2020.

iTTS system incorporates four modules which include:

Membership module – This covers first-time application, renewal of membership, and management of membership issues.

Catalogue module – The module covers Tea dispatch by producers. Once the producer has dispatched the teas, the broker consolidates the teas from the different producers and prepares a closing catalogue. The warehouse has also the mandate of updating received teas in the iTTS once they physically arrive at the warehouse. On the week before the auction, the broker publishes a sale catalogue that has the valuations and their comments on the teas. This is the final catalogue that is used for auction. The buyer has also a feature to pre-set prices and input their comments.

Auction module - This is a transition in the actual bidding process from the manual outcry system to a fully automated system. It is a trade engine with different logic to accept the highest bid value offered by Buyers and declare the sale.

Business module - Supports generation of sale Invoices by the brokers and payment references by the buyers. The module also integrates with Bank systems to get confirmation on the payment receipt. When payment is updated on iTTS, the broker Generates Tea Release Documents and Delivery orders. Once the buyer has received the delivery order, they generate Loading Instruction which is sent to the warehouse to enable the release of teas. The warehouse releases teas based on the loading instruction and issues a Release Certificate.

iTTS Process Flow

1. Pre-auction
2. Auction
3. Post-auction

Benefits of the integrated tea trading system

Central data repository system: Data mining from the online auctions which will provide EATTA and its members, as well as other tea stakeholders in the region and globally with useful data to analyze market trends, analyze market dynamics and respond to demand promptly.

Increased Transparency and visibility :Farmers will be provided with accurate information on the prices their teas fetch at the auction. Buyers on the other hand will be able to compare prices and various teas on sale.

Ease and convenience of selling teas: The Integrated Tea Trading System can be accessed from remote locations and therefore authorized buyers can participate in an auction at their comfort. This is a departure from the traditional auction that would require a physical presence at the auction floor in Mombasa.

Increased buyer participation :There is an opportunity for more Buyers participation. Participation of the buyers is not restricted by the physical size of the auction floor.

Introduction of multi-auction system :With the upcoming initiatives on running parallel auction systems, more volumes will be traded on within the shortest time possible.

?The Strengths of The Auction System

Everything is public: Weekly prices are set in an open forum, with great transparency about who is buying and at what prices.

Everybody pays the same price for the same tea: Large multinational companies have no ability to negotiate lower prices.

Smaller producers can participate: It is possible for any producer to market their tea to the local, regional and international market. Without the auction it would be very difficult and very expensive to do this.

Smaller buyers can participate: All producers sell a proportion of their tea at auction, so even the smallest buyers can have access. The ability to divide lots also means tea can be bought in much smaller quantities.

It is highly efficient: It is a very effective way of moving large volumes of tea from producers to buyers, and helps producers’ cash flow.

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