India\\\'s dominance drives out BD from Thai jute-bag mkt

Bangladesh has virtually been driven out from Thailand's jute-bag market as India is cashing in on undercut rates utilising its free-trade agreement (FTA) with the ASEAN bloc country, government officials said.
Millers claimed that a sudden fall in demand for jute bags in Thailand knocked down Bangladesh's export of the item to almost zero.
Recently, an inter-ministerial meeting at the Ministry of Commerce (MoC) decided that Bangladesh Tariff Commission will examine whether signing an FTA will help raise export to Thailand.
Sources said months back Bangladesh ambassador to Thailand Saida Muna Tasneem in a letter informed the foreign ministry that Dhaka's jute bag export to Bangkok had declined to almost nil because of India's market dominance.
She said the Indian millers are offering jute bags at US$1.0 each while Bangladeshi ones cost $1.50 for each.
Referring to rice exporters she said due to FTA between Bangkok and Delhi, farmers importing jute bags from India pay lower than they do in importing from Bangladesh, making Bangladeshi jute bags less competitive.
Ms Tasneem mentioned that India also has appointed a number of lobbyists with the Thai commerce ministry, prime minister's office and rice grower and miller circles that are helping them secure all current orders, which could have been of Bangladesh's.
"Even in an apparently saturated market India is currently exporting jute bags not only to Thailand but also from Thailand to Cambodia whereas they make these jute bags using Bangladesh jute only," she said.
According to the ambassador Bangladesh's $40 to $50 million worth of annual export to Thailand is mainly featured by jute bags and jute goods. The total export went up to $94 million in fiscal year 2012-13 when jute-bag export soared due to Yingluck Shinawatra government's rice-pledging scheme.
The scheme now stands terminated and under scrutiny of the new government.
Bangladesh's imports from Thailand in fiscal year 2013-14 amounted to $741 million against export of goods worth a peanut $39 million. The trade gap between the two countries is widening day by day.
Secretary of Bangladesh Jute Spinners Association Shahidul Karim told the FE Sunday that the demand for jute bags in Thailand went up due to the rice-pledging scheme of the Yingluck government under which rice was bought from growers directly and exported in jute bags.
After the fall of her cabinet, the new government has suspended the scheme and stopped buying rice from growers directly. Ever since, the private-sector exporters are exporting rice in poly-bags, pushing down the jute-bag demand.
Replying to a query Mr Karim said Bangladesh's export duty on jute bags is 10 per cent while India's 7.5 per cent.
"This duty gap does not make big difference on jute bag price. Actually, Bangladesh's jute-bag export to Thailand fell because of fall in demand," he added.
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