Raise in cash subsidy on export sought
Thursday, 23 October 2008
FE Report
The country's jute-yarn manufacturers have voiced concern over the global financial crisis and sought immediate government steps to stave off its adverse impact on the local export-oriented sector.
"We appeal to the government to take pragmatic steps to help protect the local export-oriented sector from any fallout of the global financial turmoil," Chairman of Bangladesh Jute Spinners Association (BJSA) Sabbir Yousuf said in a statement Wednesday.
Otherwise, the country's exporting sectors would be unable to recoup any loss caused by the world financial shock, he cautioned.
Among the steps, the apex body of local jute spinners suggested that the government either enhance the rate of cash subsidy on export of jute goods to 15 per cent from the existing 7.5 per cent or devalue the local currency to a justifiable level.
Mr Sabbir Yousuf mentioned that Bangladesh's main competitor in the jute sector, India, had recently devalued its currency by around 21 per pent in phases, as a result of which the local jute goods have become less competitive in the export markets.
Besides, the BJSA chairman said the local jute mills had to bear the brunt of soaring prices of raw jute and petroleum fuel in the recent months.
"The overall production costs of local jute goods marked 45 per cent rise in the recent times, mainly because of the soaring prices of jaw jute and petroleum oils," he added.
The BJSA leader said the number of advance purchase orders made by foreign buyers fell considerably during the last couple of months against the backdrop of the global financial crisis.
Referring to statistics, he said importers usually make advance orders for buying 23,000 to 24,000 tonnes of jute yarn a month.
Around 90 per cent of the country's exported jute yarns are used by carpet manufacturers across the globe, he said, adding that the demand for carpets has dropped significantly in recent times due to the prevailing financial turmoil.
Bangladesh earns nearly Tk 22 billion (2,200 crore) annually by exporting jute goods, of which about Tk 14 billion comes from the shipment of jute yarns, BJSA sources said.
The country's jute-yarn manufacturers have voiced concern over the global financial crisis and sought immediate government steps to stave off its adverse impact on the local export-oriented sector.
"We appeal to the government to take pragmatic steps to help protect the local export-oriented sector from any fallout of the global financial turmoil," Chairman of Bangladesh Jute Spinners Association (BJSA) Sabbir Yousuf said in a statement Wednesday.
Otherwise, the country's exporting sectors would be unable to recoup any loss caused by the world financial shock, he cautioned.
Among the steps, the apex body of local jute spinners suggested that the government either enhance the rate of cash subsidy on export of jute goods to 15 per cent from the existing 7.5 per cent or devalue the local currency to a justifiable level.
Mr Sabbir Yousuf mentioned that Bangladesh's main competitor in the jute sector, India, had recently devalued its currency by around 21 per pent in phases, as a result of which the local jute goods have become less competitive in the export markets.
Besides, the BJSA chairman said the local jute mills had to bear the brunt of soaring prices of raw jute and petroleum fuel in the recent months.
"The overall production costs of local jute goods marked 45 per cent rise in the recent times, mainly because of the soaring prices of jaw jute and petroleum oils," he added.
The BJSA leader said the number of advance purchase orders made by foreign buyers fell considerably during the last couple of months against the backdrop of the global financial crisis.
Referring to statistics, he said importers usually make advance orders for buying 23,000 to 24,000 tonnes of jute yarn a month.
Around 90 per cent of the country's exported jute yarns are used by carpet manufacturers across the globe, he said, adding that the demand for carpets has dropped significantly in recent times due to the prevailing financial turmoil.
Bangladesh earns nearly Tk 22 billion (2,200 crore) annually by exporting jute goods, of which about Tk 14 billion comes from the shipment of jute yarns, BJSA sources said.