Into the third year of trading, online potato auction has shown significant improvement in terms of volume.
Compared to the last two years, the volume exported through online auction has increased by almost 60MT which is a huge success. The volume till Thursday had surpassed last season’s total export. It is expected to increase by the end of the season.
Last year, 1,443 MT worth Nu 37.6mn was sold through online auction from Phuentsholing auction yard. This year, 1,503MT worth Nu 39.4mn is already sold. Food Corporation of Bhutan had traded 316MT of potatoes in 2016 followed by a huge increment of 1,147MT of potatoes in 2017.
Also, the number of registered bidders increased from 12 to 15 this year.
FCB has initiated various methods to encourage farmers to shift from conventional to online trading like prompt payment system and return of packing bags which otherwise would cost Nu 25 per bag if sold through conventional auctioning. FCB’s Manger of online unit, Phub Gyeltshen said that farmers are gradually getting convinced about the benefits of online auction.
Also the trade, unlike the traditional auction is faster. The farmers need not wait for days to auction their potato. The farmers had to wait for days for the payment in the conventional trade during the peak season.
With two potato grading machines installed, the farmers opting to sell through online auction can avail immediate services. Two machines can grade up to four truckloads of potato daily. FCB will add two more grading machines soon.
“Now, the trend is gaining popularity. Still a lot more has to be done to convince them about the advantages of online trading,” he said.
The prime advantage of trading through online auction is that the farmers are fetched uniform rate for the whole lot whereas the rate varies according to the size and quality in conventional auctioning. Another advantage of online auction is that the farmers save time and labor cost to grade themselves at the source. For online auction, they can pack raw and bring their produce to the yard where the machines grade.
Two varieties of potatoes are sold with four different sizes each. The average rates for potatoes have also improved this year in online trade. This year, the large potato went at Nu 30 per kilogram (kg) which is better than last season. Small potato this season fetches Nu 27 which is also better than last season. The prices for two medium varieties have also increased according to the manager.
Most of the auctioned potatoes go to Nepal and the rest to north India. So far FCB has not traded to third countries. “We feel the necessity for better prices and secured market,” Phub Gyeltshen said.
Online potato auction began in 2017 in the country. FCB and Royal Securities Exchange of Bhutan Limited (RSEBL) have installed potato grading machine and online auction portal in FCB’s auction yard aimed at rendering faster, efficient and convenient auctioning service to the farmers.
The online commodity exchange or e-auction is an initiative supported by RSEBL primarily aimed at commercializing farm produces and standardizing the quality which would help to fetch a better price. Supported by RSEBL, FCBL currently renders grading services to potato growers through the operation of two grading machines in Phuentsholing and one in Samdrup Jongkhar. The installation of grading facilities and online auction service was first initiated in 2016 on a trial basis in Phuentsholing.
With the service, the farmers’ efforts in marketing is expected to minimize unlike auctioning through traditional method.
The trend is expected to improve in the future. But improving infrastructures at the yard need to be prioritized. There is not enough stock-yard if the trade freezes for days. “We consider those issues and the management is looking for a solution,” Phub Gyeltshen said.