BJMC to get Tk 2.60b conditional loan to buy raw jute

The state-owned Bangladesh Jute Mills Corporation (BJMC), facing a huge fund crunch, is set to receive conditional loan of Tk 2.60 billion from the government to purchase raw jute for its mills, officials said.
The finance division, which is under the ministry of finance (MoF), disbursed the amount to the ministry of textiles and jute (MoTJ) for the BJMC.
The Corporation will receive the money within the next few days, according to the MoTJ.  
"The loan is repayable within five years with five per cent interest rate," said the disbursement order issued by the MoF on July 31, 2016.  
The conditions of the loan are that the BJMC cannot spend the money for other purposes except purchase of raw jute for its mills and the amount must be paid through Account Payee Cheques.
The Corporation will also have to submit the details of money expenditures to the MoF within the next three months to be prepared by a reputed Chartered Accountancy audit firm. Moreover, it will have to follow the conditions as per memorandum of understanding (MoU) between the BJMC and the finance division.  
The BJMC has set a target to purchase around 2,60,000 tonnes of raw jute directly from the growers/ farmers during the current fiscal.
Jute will be purchased at between Tk 1,800 and Tk 2,000 per maund depending on its quality from the farmers, sources at the BJMC informed.     
There are 56 purchasing centres across the country.
The BJMC started purchasing raw jute from the farmers at the centres from July 1, 2016 for supplying it to its 26 mills.  
"We have purchased 14,400 tonnes of raw jute at an expenditure of Tk 750 million till the date," acting chairman of the BJMC AK Nazmuz Zaman  told the FE.     
In the past, the BJMC mills used to buy most raw jute on credit.
But the process of purchase on credit saw huge  mismanagement.
So, the government has decided to purchase raw jute with cash directly from the farmers from the current fiscal.  
The MoTJ has been successfully implementing the Mandatory Jute Packaging Act- 2010, helping assess the actual demand of jute goods such as sacks and bags across the country, an official of the jute ministry told the FE.
He said, a total of 700 million pieces of jute sacks are required annually for full implementation of the law. Thus over 52 million sacks will be needed monthly.
Around 2.0 million to 2.20 million bales of raw jute are needed for producing 700 million jute sacks (the weight of each sack is 700 gm).     
The financial irregularities will be checked effectively following the decision to purchase raw jute with cash from the farmers. Through this process, the BJMC will make profits, according to the MoTJ.     
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