Local mill owners have proposed imposing a $250 duty per tonne of raw jute export this year
Owing to cyclone Amphan, the coronavirus pandemic and the recent flooding, jute production this year will be less than the local demand. Against such a backdrop, two organisations associated with the jute sector have demanded imposing $250 export duty per tonne of raw jute to discourage export.
Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners Association (BJSA) made the demand at a press conference in Dhaka on Wednesday. Leaders of the organisations including BJSA Chairman Md Zahid Mia and BJMA Chairman Mohammed Mahbubur Rahman Patwari elaborated on the demand before the media.
Zahid Mia said this year's jute production will be reduced to 55 lakh bales due to natural calamities and the pandemic, while the production target was 84 lakh bales. The average production of raw jute in Bangladesh is around 75 lakh bales.
He said local mills will require 60 lakh bales while household use will need another 5 lakh bales of raw jute this year. The total demand stands at 65 lakh bales.
Referring to export data, Zahid Mia said 10 to 12 lakh bales of raw jute are exported from this country. He commented that the demand for raw jute would not be met this year since the production has dropped.
He estimated that the raw jute production in the country will be about 10 lakh bales less than the domestic demand.
Meantime, Mahbubur Rahman Patwari said that the price of raw jute is at a record high this time due to high demand and low supply. The mill owners have to buy raw jute at Tk2,750 even in this peak season.
"Previously, the price of per maund [40 kilograms] of raw jute went up to Tk2,400-2,500. It climbed up further by Tk250-300 in one week, raising the jute item production cost to Tk3,200. Buyers are less likely to purchase them at that price," he added.
BJSA Chairman Zahid Mia said per tonne raw jute export can generate 5-6 jobs while making jute items from per tonne raw jute can generate employment for 70-80 people. Around 30-40% value can be added to jute-made products.
"It is completely up to us whether we export raw jute or jute-made items," he noted.
BJMA Chairman Mahbubur Rahman Patwari said raw jute price dictates the prices of jute-made products. If the price of raw jute skyrockets, the production cost will also increase. International and domestic buyers will stop using jute products if the jute mills close due to the raw material supply crunch.
"This will be a serious disaster to the country's jute sector," he feared.
Leaders of the organisations said that the market price and supply of raw jute need to be kept at a tolerable level to protect the jute industry.
They commented that if the jute mills face closure due to supply shortage, the mill workers will subsequently lose their jobs and it will hurt the economy. Jute mill closure will also put banks, financial institutions and insurance companies in trouble.