Per maund raw jute hits Tk2,700-2,900 this season while rate of the fiber hovered around Tk1,300 last year
Shahin Hossain, a local jute grower of Jashore, came to the district's Khajura jute market with his yield last Monday. He sold five maunds of the natural fibre at Tk14,500 at the wholesale market in the country's south-western district, which is widely known as one of the key quality jute growing areas.
"I was concerned over the yield due to cyclones and flooding. The public jute mills closure in this season also worried me. However, good prices now have allayed my fears," said Shahin.
Like him, jute growers across the country are getting higher prices after the pandemic, cyclone Amphan and prolonged flooding affected part of their production. In the meantime, the spiraling raw jute price worries millers as they say spiked jute prices will push up production costs of jute-made items, and this ultimately will affect export.
In Jashore, Bogura, Tangail and Sirajganj, per maund raw jute is currently selling at Tk2,700-2,900 depending on the quality. However, the rate is even Tk3,000 in places. The price was at Tk1,800-1,900 even a month ago.
Last year, raw jute price hovered around Tk1,200-1,300 per maund.
Bogura jute trader Md Mokhlesur Rahman said flooding damaged jute production in many parts of the country this year – leading to speculations that the entire jute market would go down. However, both demand and price have been good so far.
Farmers, traders and millers have said low jute production and export of raw jute are basically pushing up prices of the fiber in local markets.
Though jute production was good in Jashore as the south western district was not affected by flooding, inundation this year has vastly ruined production of the cash crop in northern Bogura, Sirajganj and Tangail.
Bangladesh produces on average 65 lakh bales of jute per year. The country produced 68 lakh bales of the natural fiber last year. According to the Department of Agricultural Extension, this year's jute production target was 82 lakh bales. Farmers this season sowed jute on 7.26 lakh hectares of land.
An agriculture ministry report said flooding submerged 13% of land and vastly damaged cultivation of the crop this year.
ATM Shafiqul Hasan Jewel, managing director of the Bogura-based Hasan Jute Mills and Hasan Jute and Spinning Mills, said the mills need 65-70 tonnes of jute every day to keep the production lines running.
Jewel said raw jute the mills bought last year at Tk1,200-1,300 per maund has climbed to Tk2,700 this year and the mill authorities are concerned over the unusual hike in price.
Raw jute the mills bought last year at Tk1,200-1,300 per maund has climbed to Tk2,700 this year and the mill authorities are concerned over the unusual hike in price
The Jashore-based Afil Group has four weaving mills in the district. Afil Group Director Mahbub Alam Lavlu said the group collects the raw material from Jashore and Faridpur as the two districts grow premium quality jute.
Lavlu said this year's quality jute is good too, but the price is too high while the yield is low.
Millers for capping raw jute export
Bangladesh Jute Mills Association and Bangladesh Jute Spinners Association recently sent letters to the Prime Minister's Office and Ministry of Textiles and Jute, demanding a capping of raw jute export as this year's jute production is low compared to local demand.
The mills annually require 60 lakh bales while another 5 lakh bales of jute are used in households.
In the letter, the associations of private millers said they will face around 10 lakh bales of raw jute shortage this year due to the fall in production. Raw jute export continuation will widen the gap and intensify the situation, and a raw material crunch might force many millers to suspend production in January 2021.
According to the Export Promotion Bureau, raw jute export in July in the 2020-21 fiscal year is around 58% higher than the year-on-year export.
The associations claimed that export earnings from jute products manufactured by one tone of raw jute are much higher than a direct export of one tonne of raw jute. Per tonne raw jute export can generate only 5-6 jobs while making jute items from per tonne raw jute can generate employment for 70-80 people.
The mill owners proposed that the government impose a $250 export duty on jute, stopping jute hoarding by traders with no licences and not allowing documented traders to stock 1,000 maunds of the fiber for over one month.
If we do not cap raw jute export now, the supply crunch might force many of us to suspend production in January next year
Bangladesh exports raw jute to several countries, including India, Pakistan and Brazil.
Contacted by The Business Standard, the President of Bangladesh Jute Mills Association, Mahbubur Rahman Patwari, said, "If we do not cap raw jute export now, the supply crunch might force many of us to suspend production in January next year."
He said the spiraled jute price has already raised the prices of jute products, and this will affect exports too.
The country currently has 259 private jute mills, which employ around 2 lakh workers.The mills export 6.70 lakh tones of jute-made products annually to the tune of Tk5,200 crore.
The Business Standard Jashore Correspondent contributed to the report