Raw jute export earnings decline by $1.0b in Q1

Arafat Ara Raw jute export earnings marked a decline by around Tk 1.0 billion in the first quarter (Q1) of the current financial year compared to the corresponding period of last year due to low price quotation by the buyers. Industry insiders say international buyers have been offering low prices for jute amid price fall in the local market. Though export volume of the product has increased during the period the earning has declined due to price fall. The country has exported 431,364 bales of raw jute during the July-September period of 2011-12 fiscal year (FY) worth Tk 2.91 billion. In July-September period of 2010-11 FY 237,351 bales of raw jute worth Tk 1.951 billion were exported, official data of Department of Jute showed. Bangladesh Jute Association (BJA) chairman Mahfuzul Haque said although the export volume of raw jute increased during the first quarter of this year the value had declined to a great extent due to low price of the product in the local market. He said last year they sold per tonne raw jute at $ 700. In the present fiscal, the price of the product is varying from $ 420 to $ 460 in international market. "The buyers have attributed the price fall of the product to Bangladeshi media reports that raw jute price has decreased substantially in the country. So they are offering a lower price," said BJA chairman adding we have purchased the product at a higher price on the eve of the season. Mr Haque mentioned that they bought per maund raw jute at Tk 1600 in the beginning of the season. "Presently the price of the golden fiber has fallen nearly 50 per cent in the local market as the millers have reduced the volume of purchase." He said many traders incurred losses for buying jute at high prices. The loss has squeezed the buying capacity of the traders. "We are not able to meet the demand of the international market of the product this year as we can't purchase raw jute due to shortage of fund", he added. BJA exported 2.2 million bales of raw jute last year but it this year it will be able to export 1.8 million to 2.0 million bales due to financial crisis, said the traders. F R Jute Spinning Mill Ltd managing director Fazlur Rahman, a major raw jute exporter in the country said not only price, the demand of raw jute also shrunk for the last three months. Debt crisis in Europe, double-dip recession in developed economies and depreciation of the Indian rupee against the US dollar also dampened the demand. India, China and Pakistan are the major buyers of Bangladeshi raw jute. Vietnam, Ivory Coast, Malaysia, the Netherlands, Nepal, Bhutan, USA, Russia, and Thailand also import raw jute from the country.