Jute spinners concerned over shortage of raw jute
Wednesday, 3 February 2010
FE Report
The country's jute mills are facing a drastic shortfall in supply of raw jute this year, which poses a threat to continued production in a number of units, the industry said.
Voicing deep concern over the supply scarcity of raw jute, the Bangladesh Jute Spinners Association (BJSA) has sought the government intervention in the survival of the local jute industry.
They urged the government not to withdraw the export ban on raw jute and take necessary steps so that dealers are not able to stock above 1000 maunds of raw jute for more than a month.
"If the restriction on export of raw jute is withdrawn, many jute mills will face closure," the BJSA Chairman Ahmed Hossain said.
The Association leader also suggested that the Jute Department should strengthen its monitoring whether any unauthorised trader is hoarding raw jute or not.
About the supply scarcity, he said the country's 178 jute mills require at least 1.3 million bales of raw jute to sustain their production this season.
Both the state-run and private mills procured only 2.9 million bales of raw jute until January 2010 against their annual demand of 4.2 million to 4.5 million bales, Mr. Hossain said.
He also attributed the prevailing supply shortage to a major shortfall in the country's jute output.
Although the raw jute requirement for both exports and domestic consumption accounts for nearly 6.5 million bales per annum, the country's total output of the fibre was estimated at 4.5 million bales this season.
Usually, raw jute ranging between 1.8 million and 2.0 million bales are exported annually, he added.
Against the backdrop of the supply shortage, the prices of raw jute have gone up abnormally with the fibre selling at Tk 2000 to Tk 2100 per maund, which pushed up the production costs of the local jute mills significantly.
Keeping this end in view, the government on December 7, 2009 put a ban on export of raw jute of all sorts.
By this time, the government has already relaxed its ban, allowing export of raw jute, for which letters of credit (LCs) have been received before imposition of the export restriction.
The BJSA chairman said if the export ban is withdrawn, it would deepen the supply crisis of the raw jute for the local mills again, and also cause further price hike of their basic raw material.
The country's jute mills are facing a drastic shortfall in supply of raw jute this year, which poses a threat to continued production in a number of units, the industry said.
Voicing deep concern over the supply scarcity of raw jute, the Bangladesh Jute Spinners Association (BJSA) has sought the government intervention in the survival of the local jute industry.
They urged the government not to withdraw the export ban on raw jute and take necessary steps so that dealers are not able to stock above 1000 maunds of raw jute for more than a month.
"If the restriction on export of raw jute is withdrawn, many jute mills will face closure," the BJSA Chairman Ahmed Hossain said.
The Association leader also suggested that the Jute Department should strengthen its monitoring whether any unauthorised trader is hoarding raw jute or not.
About the supply scarcity, he said the country's 178 jute mills require at least 1.3 million bales of raw jute to sustain their production this season.
Both the state-run and private mills procured only 2.9 million bales of raw jute until January 2010 against their annual demand of 4.2 million to 4.5 million bales, Mr. Hossain said.
He also attributed the prevailing supply shortage to a major shortfall in the country's jute output.
Although the raw jute requirement for both exports and domestic consumption accounts for nearly 6.5 million bales per annum, the country's total output of the fibre was estimated at 4.5 million bales this season.
Usually, raw jute ranging between 1.8 million and 2.0 million bales are exported annually, he added.
Against the backdrop of the supply shortage, the prices of raw jute have gone up abnormally with the fibre selling at Tk 2000 to Tk 2100 per maund, which pushed up the production costs of the local jute mills significantly.
Keeping this end in view, the government on December 7, 2009 put a ban on export of raw jute of all sorts.
By this time, the government has already relaxed its ban, allowing export of raw jute, for which letters of credit (LCs) have been received before imposition of the export restriction.
The BJSA chairman said if the export ban is withdrawn, it would deepen the supply crisis of the raw jute for the local mills again, and also cause further price hike of their basic raw material.