Govt taking steps against stockpiling of raw jute

Ziaur Rahman | Published: November 07, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

To curb middlemen's booming business in the country's jute industry, the government is going to take steps against stockpiling of raw jutes by the middlemen, especially those who procure bulk quantity of jute and make huge profits.
From now on, no jute dealers or middlemen would be allowed to stockpile more than 1000 maunds of raw jute for more than month, said a circular issued by the Ministry of Textile and Jute on Monday asking the Directorate of Jute to take measures in this regard.
It also directed the authorities concerned to prevent dishonest businessmen, especially those doing business without licences, from taking part in jute trading and business with a view to ensuring smooth supply of raw jute in the market.
According to industry sources, jute growers are left in the lurch this peak season as the big buyers, mostly jute mills from Bangladesh Jute Mills Corporation (BJMC) and Bangladesh Jute Mills Association (BJMA) have shied away from the market due to delay in disbursement of fund from the government exchequer.
Although the state-owned BJMC has opened more than 140 jute purchase centres across the country, they could hardly buy any jute during the peak season for want of money. Same was the situation with BJMA jute mills. Although the central bank signed an agreement with commercial banks in August last to disburse Tk 200 billion refinance fund among jute millers to purchase raw jutes from markets, many of the jute mills are yet to get the total fund. "Till now only 20 per cent funds are available for jute purchase," said BJMA secretary Barik Khan.
In such a bad situation, producers were left with no other option but to sell their produce at non-competitive prices to the middlemen, market sources said. The middlemen, who are stockpiling raw jute, would be the ultimate beneficiaries as they would be getting premium prices at the fag end of the season when the mills from BJMC and BJMA would eventually be able to manage funds.
Farmers were compelled to sell jute at lower prices during the peak season as the middlemen continued to dominate the jute market. "More than 60 per cent of jute is now in the hands of middlemen. There is not much to talk about the local jute mills," said Barik Khan adding that most of the farmers sell their produce within a month of their harvest due to acute crisis of money. Only a few keep a small quantity of jute for their own consumption.
Last year, Bangladesh produced 7.5 million bales of raw jute, of which 2 million to 2.5 million bales were exported and 4 million bales were consumed by local jute mills to make yarn and jute goods, more than 80 per cent of which were exported.
A total of 212 jute mills are currently operational in Bangladesh. Of them, 21 are run by the government and the rest by private owners, said officials. Presently most of the mills, both under BJMA, and BJMC are incurring heavy losses and passing crucial time due to acute shortage of fund. Many of the mills are also facing serious problems in procuring raw jutes to run their industries mainly due to fund constraints.
To finance the ailing jute mills, Bangladesh Bank has developed the Tk 2 billion refinance scheme for the jute millers and exporters. But the mills alleged delay in disbursement of loan from the fund due to cumbersome and dilly dally procedures.
mzrbd@yahoo.com