Home ›› 12 Sep 2022 ›› Front
Bangladesh’s jute millers – already in trouble due to a decline in the golden fibre’s quality and production triggered by climate change impacts – are facing a double jeopardy because of the soaring raw jute exports.
Mentioning that the domestic jute production may fail to meet the target set for FY23, millers expressed concerns that the shortage of good quality fibres available locally, coupled with the rising exports of this raw material, will spell disaster for local industries.
According to the Department of Agricultural Extension (DAE), farmers harvested 76.74 lakh bales of jute till September 11 this year, which is 94 per cent of the target set at 85.55 bales. Farmers sowed jute on 7.53 lakh hectares of land, exceeding the target of 7.45 lakh hectares.
Bangladesh’s total production of jute was 82.76 lakh bales in FY22, a figure which will be difficult to exceed this FY as crops on only six per cent of land remain harvested. Industry insiders also say the country will not be able to reach the previous year’s production volume.
Besides, the productivity is low in FY23 when compared year-on-year, reaching only 10.86 bales per hectare, which is far behind the target of 11.48 bales per hectare set for FY23. The jute productivity stood at 11.11 bales per hectare in FY22.
Commenting on the jute harvest for this FY, Department of Agricultural Extension’s (DAE) Director General Md Benojir Alam said, “Due to the impacts of climate change, the quality of jute has declined. But we expect to be able to meet or get close to the production target.”
Soaring raw jute exports
Bangladesh’s raw jute exports rose by 63.84 per cent to $33.44 million in the first two months of FY23, compared to $20.41 million recorded in the same period previous fiscal year, reveals data from the Export Promotion Bureau (EPB).
Industry insiders say the country is exporting raw jute to India, Pakistan and China. If Bangladesh bans raw jute exports, these countries will be bound to import yarn, fabric or finished goods from here.
Esrat Jahan Chowdhury, director of Bangladesh Jute Goods Exporters Association, said, “Due to raw jute exports, we are losing the opportunity to earn more foreign currency. This is not just a loss for businesses, but the country too.
“We will be able to double our foreign currency earnings if the government bans raw jute exports.”
Monami Impex Ltd’s Director Syed Ali Alfe Sany Akash said, “The government always encourages us to diversify our products, but they are also permitting raw jute exports – despite a low domestic production volume – before we can fulfill our demands.
“Rising exports mean the demand for jute fibres is increasing outside the country. But demand is also going up in the domestic markets because many government-owned jute mills have gone under private ownership, and those are now in production.”
Farmers not getting fair prices
Though the export of raw jute is soaring, farmers are not happy with the prices they are getting. According to jute farmers, the production cost per maund of jute is nearly Tk 2,500 – Tk 2,700, but the sales price hovers around Tk 2,300 – Tk 2,700.
“I came to a haat to sell two maunds of medium quality raw jute, and asked for Tk 2,800 per maund. But traders offered me Tk 2,600 per maund, which is lower than my production cost. So I did not make any sales,” said Zakaria Khana, a jute grower in Pabna district.
Anwar Hossain, another raw jute grower of Rajbari District, said “The traders offered me Tk 2,400 for per maund of low quality raw jute, which is far lower than my production costs. Due to the drought, most of the raw jute’s quality dropped to a lower grade.
“We are not getting fair prices, and I fear losses.”
A number of DAE officials however claimed that it is still early in the jute season, and this is why raw jute prices are a bit low. They say the farmers will be able to make a bit of profit in the coming days.
DAE’s Benojir Alam said, “Considering that it is early in this season, raw jute prices are not too low. But it is true that due to a shortage of water, jute production costs in this season have gone up.
“We expect that the prices will increase further after a couple of weeks, and during this time, farmers will be able to make a little amount of profit.”
Jute sector in a bind
Industry insiders say the current season’s jute fibre quality suffered due to droughts and floods, while the production cost of jute goods rose by 30 per cent because of high raw jute prices in the last season.
This is why most companies are yet to start bulk purchasing of raw jute this year.
On the issue, Monami Director Akash said, “Our daily production declined by 40 per cent due to high production costs and low orders. Amid the ongoing situation, the government allowed raw jute exports since the early harvesting season, which pushed us into further crisis.
“I am urging the government to halt raw jute exports from mid-August to mid-January in support of the domestic industry.”
Esrat Jahan said, “Due to low quality of raw jute and higher prices, export orders have gone down. A group of middlemen is also hoarding huge volumes of raw jute illegally.
“If the government does not take adequate initiatives to protect raw jute from this syndicate and stop the fibre’s exports, the sector will lose the opportunity to earn a significant amount of foreign currency.”
Government officials concerned claim that they are already working to bring the syndicate to books, and ensure stability in the raw jute market. However, the government currently has no plans to halt raw jute exports, insiders say.
Md Enayet Ullah Khan Eusuf zee, director general of Department of Jute, said, “Being a middleman is legal. But we have set a limit of stoking raw jute. Law enforcers are regularly conducting drives to enforce the rule of law.
“If jute millers or their association have any information about any syndicate or illegal hoarding, we urge them to make that information available to us.”
Commenting on raw jute exports during its harvesting season, Enayet Ullah said, “It is a high level government policy. Millers have urged the government to halt raw jute exports for a certain period, but the authorities concerned are yet to respond on the issue.”
