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Jute & jute goods export falls below $1b

Earnings declined by 19% YoY to $912m in FY23
Talukder Farhad
06 Jul 2023 22:43:15 | Update: 07 Jul 2023 14:26:35
Jute & jute goods export falls below $1b

The jute and jute goods industry – with value addition of almost 100 per cent – is one of the most promising sectors in Bangladesh, but its earnings have yet again fallen below the $1 billion mark.

Though the sector has a lot of potential, its export earnings have not witnessed a significant upward trend throughout the last decade.

Latest data from the Export Promotion Bureau (EPB) show export earnings of jute and jute goods fell by 19 per cent to $912 million in FY23, compared to $1.12 billion recorded in FY22.

Under the category, export earnings of jute yarn and twine have declined the most by 28.64 per cent to about $498 million in FY23. But in FY22, the amount was around $698 million.

Export income from Jute sacks and bags rose by almost 8 per cent to $109 million in FY23, compared to the previous year. However, raw Jute export income decreased by 5.5 per cent to $204 million in FY23.

Exporters say buyers are now in a crisis due to the Russia-Ukraine war. Besides, as the consumers’ income in export destination countries has decreased, so has the demand for jute and jute goods. This is why export earnings from jute fell in the last financial year.

Esrat Jahan Chowdhury, director of Bangladesh Jute Goods Exporters Association, told The Business Post, “Many buyers are not ordering like before due to the instability in the European market, triggered by the war between Russia and Ukraine.

“The production costs in Bangladesh have gone up, so jute goods prices are also increasing. But many buyers are not interested in buying products at higher prices.”

She added that jute products are usually used as packaging. Because of the recent price hike, many consumers are turning to alternatives to reduce costs. So, the demand for jute items overseas witnessed a decline in the last FY.

Why are jute exports not rising?

Bangladesh's main export product is ready-made garments. In FY23, the country’s total export income rose by 6.67 per cent based on this product. But the value addition of RMG is only 50 per cent.

Though the value addition of jute or leather is around 100 per cent, the export income of this sector is not increasing as expected, industry insiders say.

Distinguished fellow of Centre for Policy Dialogue (CPD) Prof Mustafizur Rahman said, “High value addition in export earnings are decreasing, and this is a concerning issue. Jute is among one of them, so we need to do more to develop this market further.

When asked why the export income of jute and jute goods is not increasing as desired, Bangladesh Jute Goods Exporters Association Chairman S Ahmed Mazumder said, “Our main problem is that production is lower than export demand.

“Most of the Bangladesh Jute Mills Corporation (BJMC) factories are not running, while the production capacity of smaller factories is also low in the private sector.”

He added, “The private sector has more than 300 factories, but their daily production is less than 10 tonnes. India is taking over the markets in places where we are unable to fulfill the demand.

“Although the quality of our jute is good, we are falling behind because of our low production capacity.”