Jute sector has to stay competitive

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Shahiduzzaman Khan
Jute goods and raw jute exports witnessed a rise in the recent past, at a time when earnings from many other export items slipped to a marked extent because of the late impact of global recession.
The exports of raw jute and jute goods are rising due to mounting pressure for using degradable and eco-friendly products in many parts of the world.
People involved in jute goods and jute yarn manufacturing blamed the export of raw jute for the low supply and high prices of jute in the local markets. But raw jute exporters said its high demand in India, Pakistan and China is boosting the country's raw jute export growth, and helping farmers receive good prices this year. The government has recently withdrawn ban on export of raw jute. India and China are importing raw jute from Bangladesh to produce different jute-made products, including sacks, yarn and bags, demand for which is increasing in those countries. On the other hand, Bangladesh now exports jute products to around 30 countries, including Canada, Japan, European Union (EU) and the United States. In July-September period, jute goods exports earned $85.62 million, witnessing 5.18 per cent growth.
The state-owned mills under Bangladesh Jute Mills Corporation (BJMC), which have otherwise earned some bad name for corruption and perennial losses, have already approached break-even, heralding good times for the golden fibre. At least seven out of the 16 jute mills are now making profits to the tune of Tk 20 million a month on an average, while others have significantly brought down losses. Reviewing such a situation, the jute minister appears to be upbeat. He said the jute workers regained their confidence, while production and export volumes and prices went up. Above all, the government has the political will to improve this sector, he added.
Now the question is: will Bangladesh ever regain the lost glory of the jute industry? That is a burning issue. This is more so because jute was once popularly considered, and is still considered, as 'golden fibre' for socio-economic values in Bangladesh as well as its commercial potential. But the tragedy is that this much-cherished fibre, both as a most valuable agricultural product as well as a raw material for running the mills, appears to have gone into oblivion.
Once, raw jute and jute products were the biggest foreign-exchange earner. Jute had then a flourishing international market of its own, spreading its superiority in the world market. But the situation is completely reverse now. With the closure of Adamjee and the People's Jute Mills, along with other jute mills, tragedy fell on the jute growers and traders as there were no buyers in the country, opening the gates for smuggling of raw jute to India. And the situation worsened when the largest jute producer in the region produced just only 0.1 million tonnes of jute per year, while India was producing annually over two million tonnes of raw jute.
However, some positive signals are coming from the government's side, as is evident from the latest move by the Parliamentary Standing Committee on Jute and Textile Ministry. It asked the authorities concerned to allocate more money to purchase jute this year and to resume operations of the Second Unit of Adamjee Jute Mill soon.
As for technology, Bangladesh industries are continuing mainly with outdated technology. This has resulted in low productivity and high material cost for production. It is time for Bangladesh to adopt a technological profile to meet the techno-economic need. The privatisation of jute mills may be slowed down until new investments are encouraged. Another good step by the government would be to adopt necessary measures to revive the jute sector. Fortunately, raw jute is now fetching high price, and its export market has picked up.
Revival of the jute sector will certainly help to rejuvenate the rural economy directly and indirectly. What is needed now is formulation of a good jute policy with the close cooperation of, and concerted effort by, ministries of jute, agriculture, industry and textiles. Proper implementation of the policy may make the jute sector dynamic.
Jute has lost its past glory because of the wrong policies of different regimes. It is a natural fibre, durable and eco-friendly. Although jute was the main source of earning foreign exchange in the past, the rise of apparels and garments did not lend an urgency to the need for addressing effectively the problems of the golden fibre. The jute sector lost its importance as a foreign exchange earner for the country. The emergence of synthetic sector has also had an adverse effect on the development of jute sector. As soon as the synthetic products occupied the market, the demand for jute in the international market was largely squeezed. But recently the demand for jute has resurfaced in the global market.
Raw jute needs to be declared as agricultural product and the export of raw jute, as agro-based industrial operation. From growers level to export, there are various stages and it costs more money after purchase of loose jute. Because of different processing stages, value addition is indispensable. Hence it falls under semi-processing industry. The matters relating to jute sector should be properly looked into on a priority basis, for implementation of the required policy-supports. This sector did not receive a befitting attention from all the past governments.
szkhan@thefinancialexpress-bd.com