Banning or not banning raw jute export

Price of raw jute this year is higher than that of the past years. This, no doubt, is good news for the growers who in the wake of price slump in the past were in a dilemma whether to concentrate on jute cultivation or shift to other crops. Now that growers are happy with the returns from their harvest, for the first time in years, manufacturers of jute goods are speculating a gloom that they say will result in the overall poor performance of the industry. They, however, do not attribute their fear to the fair price that the growers are getting. But what is important for them is to have adequate supplies of raw jute at reasonable prices so that they do not run out of raw material, or for that matter, keep their factories underutilised or even shut in case the situation turns really worse.
At present, a maund of raw jute is priced at Tk 1,600 to Tk 1,800 in producing areas. This is 13 per cent higher than that of the previous year. One of the reasons believed to be behind the price rise is a speculation that production might be far less than the previous year, which  allegedly has prompted the middlemen known as forias  to stock raw jute at a relatively high price to make higher profits in off-season. Coupled with this is unrestricted export of raw jute which is likely to create scarcity for the millers and others engaged in manufacturing jute-based products. As a quick solution, the manufactures - especially the spinners -- are in favour of a temporary ban on raw jute exports. This, they argue, will add more value to the products besides supporting them with availability of raw jute for manufacturing jute products. Concerned quarters, however, do not foresee any drastic fall in raw jute production this year. According to Bangladesh Bureau of Statistics (BBS), production of raw jute will be more than the target set for the current year at 7.37 million bales (one bale equals 181 kg), which is a little less than that of the previous year.
The issue now is to ensure adequate supply of raw jute to the manufacturing plants. Banning export as suggested by many of them is an issue that needs to be examined, not just as an immediate respite but in the light of the market conditions overseas. In the past too, there were temporary bans on export of raw jute, mostly to help the millers get over difficult situations emerging from dearth of sufficient raw jute. According to the Export Promotion Bureau (EPB) data, raw jute export is on the rise. Sector insiders hold that demand for raw jute in India increased heavily as production suffered badly this year. The government, it has been reported, would assess the production, consumption of and demand for raw jute and then decide, in consultation with the stakeholders, whether to put a halt on raw jute exports. Under the circumstances, deciding on the matter should take into account all relevant issues including the current stock position as well as the real threats from the anticipated scarcity of raw jute.