Mills warn of shutdown for want of raw jute

Jute millers yesterday warned that most mills might be shut in the next one or two months suffering from a shortage of raw jute in making eco-friendly products.

Two bodies of jute millers, Bangladesh Jute Spinners Association (BJSA) and Bangladesh Jute Mills Association (BJMA), demanded that the government fully ban raw jute exports.

They also sought removal of a bar on import of the natural fibre until June 2021 in order to keep factories running, according to a letter sent to the textiles and jute ministry yesterday.

The appeal came as prices of the natural fibre shot up to as much as Tk 4,500 per maund, the highest on record, in the face of a scarcity in the market resulting from a flood-induced production decline.

Prices of raw jute began rising after the harvesting of raw jute in the July-August period last year.

By the end of September prices had crossed Tk 3,000 per maund for stockpiling by middlemen and slow release by farmers seeking to profit amid speculations that production had fallen short of the requirement.

Jute mill owners said farmers do not have raw jute anymore in their stocks and a section of middlemen and stockists were hiking prices reducing supplies.

As result of the exorbitant prices, production in factories reduced substantially and many jute mills are shutting production, said the letter adding that 95 per cent of jute mills might be forced to stop production.

The caution comes at a time when export receipts from jute and jute goods have been soaring, driven mainly by spiraling prices.

Export earnings by jute and jute goods shot up 27 per cent year-on-year $765 million in the July-January period of fiscal 2020-21 from that a year ago, showed data from Export Promotion Bureau.

Questions regarding raw jute production estimate

In the letter to the ministry, the BJSA and BJMA said mills required 60 lakh bales of raw jute for processing to make yarn, twine, bags, sacks and other goods mainly to export and make sales in the domestic market.

In addition, 5 lakh bales of raw jute are used for household purposes while 8 lakh bales exported annually.

In total, 73 lakh bales of raw jute are needed yearly in the country, said the two bodies of jute millers.

Quoting the Department of Jute (DoJ) estimate of jute production to be 74 lakh bales last season, millers said 40 lakh bales of raw of jute should have been available in the country, as factories processed 30 lakh bales and traders exported 4 lakh bales of the natural fibre in the first half of the year.

“But scarcity and an usual price spike showed that the production estimate is baseless. Jute industry faces deep trouble because of the faulty estimate,” said the BJMA and BJSA in the letter.

The letter, by BJMA Chairman Mohammed Mahbubur Rahman Patwari and BJSA Chairman Md Zahid Miah, urged the government to ensure that no raw jute trader could stock more than 500 maunds of raw jute for more than a month.

Millers also urged conducting mobile court drives to prevent the illegal hoarding of raw jute.