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Auction Heroes

Auction Heroes
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First Published: Thu, Feb 12 2009. 09 35 PM IST

Updated: Thu, Feb 12 2009. 09 35 PM IST
Though the bidders call out numbers and names in Kannada, there’s something quintessentially Dutch about the flower auction that takes place every morning in Hebbal. It’s the clock which, following the Dutch auction method for price determination, starts at a high price and keeps dropping until a buyer stops it at a bid and buys a part of the lot.
Far removed from the mayhem of the open markets of Malleswaram, Yelahanka, Jayanagar or KR Puram, where growers and buyers haggle over prices every day, the sale-by-bid at the International Flower Auction Centre housed in the premises of the Karnataka State Agro Industries Corporation is sedate and systematic. The establishment, modelled on the flower auction centre in the Netherlands and inaugurated by Union commerce minister Kamal Nath a year ago, is set on a sprawling 5.11-acre campus and marks the only institution in the city catering to the organized retail sector in floriculture—Bangalore accounts for 60% of India’s annual fresh-cut floral production.
“Unlike the English method of auction that starts with the lowest price and moves up, the method followed in Dutch flower auction houses begins at the top, which prevents buyers from banding together to keep the prices low,” says Shankar Murthy, development officer at the International Flower Auction Bangalore Ltd, the body which runs the centre. As a result, growers don’t have to attend in person and can focus on production.
Truckloads of flowers arrive each evening and are moved to a cold storage maintained at 4 degrees Celsius—the facility can store up to 300,000 stems at a time. The next morning, they are brought out on trolleys to be inspected by potential buyers before the auction begins at 8.30am.
“It can go on till noon or, at the latest, two in the afternoon,” says Murthy. “It’s a question of demand and supply. Unlike in the open market, the prices here depend on the number of buyers present at any given time. And here, that number is limited (the centre accommodates up to a hundred bidders).”
Open 365 days of the year, the auction house is a public-private partnership, the first of its kind in Asia. But the ”international” label is only in name, at least for the moment. For the most part, it caters to the needs of local growers within a 50km radius of the city, and local buyers.
“Some two weeks ago, the price of roses per stem was Rs10 in the auction, but in KR Market it was Rs2,” says Murthy. “Sometimes the reverse also happens—it’s a highly fluctuating field.”
Long-time wholesale trader Raghu Raj Urs takes advantage of the fluctuations. “I usually buy flowers directly from the farmers but sometimes it’s useful to come here,” he says, inspecting the flowers he just bought to sell at the city market.
The centre only has 100,000 stems at the moment. Bigger buyers go directly to farms and many large-scale farmers prefer to forge export partnerships without the auction house, which charges a 2.5% service fee both ways on every transaction.
K.H. Monappa, the general manager of the premises, says long-stemmed roses make up the bulk of flowers sold, with carnations, anthuriums and gerberas making up the rest of the numbers—but only roses grown in greenhouses and guaranteed to have a long life find a place. Traditional flowers such as marigold and jasmine don’t stand a chance. “They are for another market,” he says.
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First Published: Thu, Feb 12 2009. 09 35 PM IST
More Topics: Bidders | Kannada | Dutch | Flower auction | Hebbal |