Jute sector\\\'s loss tops Tk 5.0b for turmoil

Political turmoil has hit exports and local trade of jute hard by 20-30 per cent in the last 26 days, with the sector bleeding an estimated Tk 5.1 billion, insiders said.
According to businesses, August-March is the peak season for jute harvest, trading, mills' production and exports.
The Bangladesh Jute Mills Corporation (BJMC), Jute Mills Association (BJMA), Jute Spinners Association (BJSA) officials said nearly 249 jute mills in the country have been forced to cut production by 42,000 tonnes owing to the blockade enforced by the BNP-led alliance since January 5.
Supply shortage of raw jute, Jute Batching Oil and diesel due to halt in transportation has hampered production and exports.
BJSA estimates that 96 mills under the association have cut production by 22,608 tonnes worth Tk1.7 billion since the blockade began.
BJSA chairman Md Shahjahan told the FE jute yarn factories need approximately 16,000 litres of JBO per day, but supply has almost halved.
He said exporters have also halted shipment as transportation cost from the factories to Benapole and Chittagong port increased by 100 per cent while orders have also fallen significantly.
He said many yarn factories have cut production by 20-30 per cent.
BJMA secretary A Barik Khan said 145 mills under the association have cut production by 20,000 tonnes worth Tk1.45 billion in the 26 days blockade.
Many mills have cut production by more than 30 per cent, he said.
An official at state-run BJMC told the FE that stockpile of the government-owned factories increased further.  
He said BJMC's 24 mills cut production to 400 tonnes a day from 700 tonnes last year for weak demand for jute goods, mainly sacks.
He said the blockade has caused nearly a 10,000 tonnes additional to the stockpile worth Tk 700 million.
Bangladesh Jute Association (BJA) secretary Abdul Kaiyum said exports fell to 1.98 million bales (bale=180 kgs) in 2013-14 from 2.05 million bales in FY'13.
He said normally in October-March period, the association members export nearly 0.1-0.15 million bales per month.
The shipment of raw jute faced serious setback in January as export has decreased by more than by 80 per cent.
He said jute and jute sector is highly fire-sensitive. "We can't take risk in the highways," he said.
Industry insiders said if political turmoil continues, jute factories will not be able to repay bank loans in time and many of them will become defaulters.
Presently, there are 249 jute manufacturing units in the country. Of them, 96 private spinning mills produce jute yarn, while 24 state-owned mills and 145 private jute mills manufacture hessian, sacks and bags.
Exports from the sector amounted to US$824 million in FY'14 marked, the Export Promotion Bureau data showed.
tonmoy.wardad@gamil.com