THE TEA AUCTION
SYSTEM HANDBOOK

TABLE OF CONTENTS

Introduction: The Engine Room of the Global Tea Trade

Every week, in warehouses from Mombasa to Colombo, tens of thousands of tonnes of tea change hands without a single consumer ever seeing the transaction. These are the world's tea auctions: the oldest, most opaque, and still most influential price-discovery mechanisms in the industry. In 2026 they remain the main price-discovery channel for a large share of the world's traded black tea, and their hammer prices ripple through supply chains from Nairobi estates to London blending houses to the supermarket shelf.

Yet for all their importance, tea auctions are poorly understood outside a narrow circle of brokers, buyers and estate managers. How does a lot move from garden to catalogue? What separates a Mombasa sale from a Colombo one? Why do some teas bypass the system entirely, and what does that mean for price transparency? And as e-auction platforms replace century-old floor sales, what is being gained—and lost?

This handbook is written for anyone who needs to understand how tea markets actually work: trade buyers sourcing for blends or retail, analysts tracking price trends, estate managers evaluating sales channels, and serious enthusiasts who want to follow the money. We strip away the folklore and walk you through the mechanics of the four major auction centres—Mombasa, Colombo, Kolkata/Guwahati and Chittagong—explain how lots are catalogued and valued, decode the roles of brokers and buyers, and examine the structural forces reshaping the system.

The shift to direct sales, the rise of specialty bypass channels, and the digitisation of floor auctions are not mere footnotes; they are redrawing the global tea map. By the end of this guide you will understand not only how a hammer price is struck, but how that figure transmits through the value chain—and why, in an age of traceability and relationship sourcing, the auction model endures.

1. The Global Auction Landscape: Volume, Value and Geography

Four auction centres dominate the international tea trade: Mombasa (Kenya), Colombo (Sri Lanka), Kolkata and Guwahati (India), and Chittagong (Bangladesh). Together they handle roughly 900,000 tonnes to 1.1 million tonnes per year (the sum of the four centres described below)—a large share of the world's traded black tea and a smaller but growing share of green and specialty teas.

Mombasa is the largest by volume, moving approximately 400,000–500,000 tonnes annually—primarily Kenyan CTC but also Ugandan, Tanzanian, Rwandan, Malawian and Burundian teas. Colombo auctions around 250,000–280,000 tonnes of Sri Lankan orthodox and some CTC. Kolkata and Guwahati together sell roughly 200,000–230,000 tonnes of Indian tea (Assam CTC, Darjeeling orthodox, Nilgiri), though an increasing share of Indian production now moves via private sale. Chittagong, the youngest of the four, handles 50,000–70,000 tonnes of Bangladeshi tea, mostly CTC for the domestic market.

Why Auctions Persist

Auctions offer three core advantages: price discovery in a transparent, competitive environment; liquidity, allowing sellers to move large volumes quickly without negotiating dozens of bilateral contracts; and financing, since many estates rely on weekly auction payments to fund operations. For buyers, auctions provide access to a wide range of lots in a single location, simplifying logistics and due diligence.

Yet the system is under pressure. Direct sales now account for roughly 30–35% of Kenyan production (up from ~20% a decade ago), and a higher share in India and China. Specialty estates and single-origin brands increasingly bypass auctions to preserve traceability and capture margin. Understanding the auction model—and its limits—is essential for anyone navigating modern tea sourcing.

2. Anatomy of a Tea Lot: From Garden to Catalogue

A tea lot begins life on the estate. Once processed and packed—typically in 40–50 kg paper sacks (in Africa and South Asia) or plywood chests (for orthodox teas)—the producer consigns the tea to a broker, who catalogues it and enters it into the next available sale.

The Catalogue Entry

Each lot is assigned a unique reference and described by invoice mark (estate identifier), grade (BP, FBOP, PF1, Dust, etc.), net weight, season/flush (if relevant), and warehouse location. The broker draws a sample—usually 500 g to 1 kg—which is sealed, labelled and made available to prospective buyers in the broker's tasting room several days before the sale.

Buyers' tea tasters visit the broker's office, brew and evaluate dozens or hundreds of samples, and assign a maximum bid (or 'limit') to each lot of interest. This tasting ritual is the foundation of auction price discovery: every hammer price reflects not a published specification but the collective sensory judgement of professional tasters working under time pressure.

Minimum Prices and Reserves

Estates may set a reserve price (or 'upset price')—a confidential floor below which the broker will withdraw the lot. If bidding fails to meet the reserve, the lot is catalogued as 'unsold' and may be re-offered in a subsequent sale, sold privately, or returned to the estate. Reserve prices are a matter of negotiation between producer and broker, and reflect both cost of production and recent market trends.

3. The Mombasa Auction: Africa's Liquid Market

The East Africa Tea Trade Association (EATTA) auction in Mombasa is the world's largest by volume and the price benchmark for African CTC. It convenes every Monday at the EATTA headquarters, though since 2020 it has operated as a hybrid electronic and floor sale, with most transactions now concluded via the online platform.

Mombasa's dominance rests on Kenya's extraordinary productivity—Kenya is the world's largest black tea exporter—but the auction also serves as the conduit for Ugandan, Tanzanian, Rwandan, Malawian, Burundian and Congolese teas. In a typical week several thousand lots are catalogued, totalling roughly 8,000–10,000 tonnes. The auction operates year-round, with a brief recess in late December.

Buyer Demographics

The principal buyers are multinational blenders and packers (the large branded tea companies), regional trading houses (especially from Pakistan, Egypt, the UAE, and the UK), and domestic Kenyan packers. Pakistan and Egypt together absorb close to half of Mombasa's weekly volume, with the UK, Russia, Sudan and the Middle East taking most of the remainder.

Price movements at Mombasa are watched closely across the industry. A sustained rise in BP (Broken Pekoe) or PF1 (Pekoe Fannings) prices signals tightening supply and often presages retail price increases six to twelve months later. Conversely, a glut—as in periods of oversupply—can squeeze estate margins and trigger direct-sale pivots.

4. The Colombo Auction: Orthodox and Island Terroir

The Colombo Tea Traders' Association (CTTA) auction, held every Tuesday and Wednesday at the Colombo Tea Traders' Association building (and increasingly online), is the global hub for Sri Lankan tea and the largest market for orthodox black tea. Unlike Mombasa's CTC-led catalogue, Colombo offers a wide range of orthodox teas—high-, medium- and low-grown, from Nuwara Eliya, Dimbula and Uva down to the southern low-country—alongside a small quantity of CTC and a small but growing share of green and white teas.

Colombo's structure reflects Sri Lanka's dual identity: a high-volume orthodox producer—much of it low-grown tea—for the Middle East, Russia and the CIS, and a premium origin for connoisseurs and specialty blenders. The great majority of the volume sold is orthodox black tea; CTC, green, white and flavoured teas make up a small remainder. Total throughput is around 5,000–5,500 tonnes per week.

Regional Premiums

Sri Lankan tea is catalogued by elevation and district, and these appellations carry real price premiums. High-grown teas (above 1,200 m) from Nuwara Eliya or Uva can command 2–3× the price of low-grown tea from Ratnapura or Galle, even within the same FBOP grade. The auction catalogue explicitly notes elevation and district, and buyers rely on these markers as proxies for flavour profile and quality.

Colombo's buyer base is more geographically diverse than Mombasa's. The Middle East (Iraq, UAE, Saudi Arabia, Iran) and Russia remain the largest markets by volume—mostly for low-grown orthodox—while Japan, Germany, the UK, Australia and North America are key buyers of high-grown and specialty teas. The auction has also seen growing interest from Chinese and South Korean buyers seeking Sri Lankan green and white teas.