Raw jute price up again, jute mills in crisis
Price of raw jute reached a record Tk 7,000 a maund last year but price started dropping after jute mill owners became vocal against the hike.
Price of raw jute was Tk 2,500-3,000 a maund in July last year at the beginning of current season. Two months later, price became volatile and reached Tk 3,800 a mound in December last.
This time, jute mill owners also bear the burden of price hike. They said many entrepreneurs are not operating their factories in full capacity of their production because of price hike. Some also keep the factory shut. Many others lost foreign buyers because of the last time’s anarchy over raw jute. If it repeats this year, jute mills will turn into weak industries.
Leaders of Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners Association (BJSA) held a meeting on the price hike of raw jute last week.
At the meeting, they decided to purchase high quality jute for Tk 3,200 a maund and low quality jute for Tk 2,700 a maund from Sunday. They also decided to keep jute mills shut for an indefinite period from 1 February unless the government agencies concerned take action against the illegal hoarders of raw jute.
According to the department of jute, 9.09 million (90.91 lakh) bales of raw jute were produced in the country in 2020-21 fiscal and 8.45 million (84.55 lakh) bales in the preceding fiscal. A bale equals to 182.25kg.
Some 6 million (60 lakh) bales of raw jute, according to BJMA and BJSA, are necessary for private jute mills annually and 500,000 bales for household usages. However, domestic demand for raw jute drops slightly since government jute mills have remained closed for one and a half years.
When asked if the data of the jute department is correct so why price of raw jute is rising, BJSA director Md Zahid Mia said business of raw jute cannot be operated without licence. But people who are not involved in jute business are stocking raw jute out of greed for excessive price.
If the jute department had tried sincerely illegal stocking of raw jute would have been stopped. Though the jute department conducts operation but they just do it on paper, he alleged.
Jute yarn used to make carpet accounts 60 per cent of export of jute and jute-processed products. Several jute mill owners said foreign buyers are showing interest to jhuts (scrap fabrics for garment factories), cotton and polypropylene (PP) yarn due to exorbitant rise in the price of raw jute. And, if price of raw jute cannot be controlled now, alternative products to jute yarn will replace it permanently.
Companies exporting varieties of jute products face crisis due to abnormal price hike of raw jute. Creation Private Limited managing director Md Rashedul Karim said business revived with improved Covid situations. But the rising price of raw jute has been causing severe trouble.
They could not make profit last time, said Rashedul Karim adding jute yield was better in the country this time. Production cost was about Tk 2,000 a maund. So, why would the price go up to Tk 3,500 a mound?
Currently, 208 factories are members of BJMA with 70 are closed. Some 96 factories are members of BJSA with 60 are in operation. Factories that are in operation employ about 250,000 workers.
BJMA chairman Abul Hossain said on Sunday, “Production has stopped by 50 per cent in our member factories due to volatile price of raw jute. We have already started losing business because of the skyrocketing price last time. Export of jute and jute-processed products drop by 11 per cent. We hope the government agencies concerned would take necessary steps to prevent the fall of the golden fibre.”
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna