The government has imposed restriction on raw jute export to increase its supply to export-oriented domestic factories.
Market surveys show the price of raw jute has hit the ceiling this harvesting season due to growing demand both at home and abroad.
The government move comes following jute-price spikes as seasonal traders have bought a big chunk to bag a windfall, says an official of the Ministry of Commerce.
A circular issued on September 8 by the commerce ministry says the export of raw jute, a cash crop cultivated by thousands of farmers across Bangladesh, especially in the central districts, would require a prior approval.
A report published in the Financial Express on September 1 showed in major jute-producing areas such as Pabna, Tangail, Rajbari, Faridpur, Gopalganj, Shariatpur and Madaripur, raw jute selling at Tk 4,000-4,300 per maund (37.32 kg)--an all-time high for any harvesting season.
Meanwhile, the firman from the commerce ministry says the exporters will have to apply to the ministry, and they will be allowed to ship only the approved quantity of jute.
Bangladesh Jute Spinners Association (BJSA) and Bangladesh Jute Mills Association (BJMA) also have recently requested the government to impose a ban on raw-jute export for smooth supply of the raw materials as well as to boost finished-product exports.
The textiles and jute ministry also sent a recommendation to the commerce ministry in this regard, say officials.
Meanwhile, the government is expecting 7.5 million bales of production which was nearly 9.0 million bales in the previous years.
However, factory owners claim the production to be 6.5 million bales.
Tapas Pramanik, president of BJSA, says they are happy that the farmers have got good prices for their crops, which are very much needed.
"Most of the farmers have completed their sale of the fibre while a large share is being stockpiled by traders to push prices even higher," he told The Financial Express.
He mentions that factories will need at least 6.5 million bales of jute this year, but production seems unsatisfactory.
According to him, BJSA alone needs 3.5 million bales and Bangladesh Jute Mills Association (BJMA) requires 2.0 million bales while another 1.0 million bales are used locally for ropes and other products.
Although the government estimates production at 7.5 million bales, he believes the actual figure is closer to 6.5 million bales.
Another jute-mill owner says a large portion of raw jute has already been exported to India by sea route.
"Raw jute is being unloaded in Mumbai. Indian traders are importing heavily, and they are also funding Bangladeshi middlemen to secure supplies for their factories," he says.
On the other hand, India has restricted Bangladeshi jute goods through antidumping duties and through ban on land ports for Bangladeshi jute products, he points out a two-pronged strategy.
Former BJSA chairman Md Zahid Mian, while appreciating the commerce ministry's move, says prices might have exceeded the 2021 record of Tk 6,200 per maund if the government hadn't taken such a timely decision.
During that time, he mentions, polypropylene yarn gained more popularity as buyers shifted away from expensive jute products.
He says regenerated cotton-yarn use in carpets has also increased, as cotton rugs are easier to fold.
"We lost around 30 per cent of our market in FY21 and FY22, and exports have been falling since then. To increase exports, we need to regain our traditional buyers," he says.
Data from the Export Promotion Bureau (EPB) shows that jute-and jute- goods exports have been on the decline since FY'22.
Export earnings from the jute sector was $1.16 billion in FY21, then dropped to $1.13 billion in FY22, $911.51 million in FY23, $855.23 million in FY24, and finally $820.16 million in FY25.
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