Raw jute supply shortage hits mills severely
Saturday, 21 November 2009
FE Report
Jute millers, severely hit by raw jute scarcity, will seek the government's immediate intervention in addressing the problem for the survival of the local units.
Voicing deep concern at a sudden supply shortage of raw jute, what the millers term an 'artificial crisis', in the domestic market, they said at least 70 per cent of jute mills would face closure if the situation persists.
They believe raw jute is either being hoarded in the country or smuggled out of the country.
Against this backdrop, leaders of Bangladesh Jute Spinners Association (BJSA) and Bangladesh Jute Mills Association (BJMA) will jointly meet with the textile and jute minister shortly to seek immediate steps from the government.
The BJSA held an urgent meeting on Thursday to discuss the adverse impact of the current raw jute scarcity and find out its possible remedy.
Presided over by the BJSA Chairman Ahmed Hossain, the meeting also decided to prepare a set of recommendations to be placed to the government.
Among them, the jute millers will urge the government to carry out a thorough assessment on the current stock of raw jute at the domestic level and also suggest that the government should put a ban on export of the fibre until the assessment is completed.
"Local jute mills have been facing an immense supply problem of raw jute in recent times for running the units… if such situation continues, about 70 per cent of the jute mills will face closure," the BJSA leader said.
The price of raw jute has already jumped to Tk 1500 Tk 1600 per maund from Tk 1200 to 1250 just a couple of weeks back, the meeting observed.
"The jute mills are unable to afford such exorbitant price of their main raw material as their cost of production will abnormally go up because of it," said Mr. Hossain.
The meeting also observed that there was valid reason behind such supply shortage as the country's raw jute output was estimated at 5.5 million bales this year. Of which, nearly 0.62 million bales of raw jute were exported during the last July-October period of this fiscal.
The local jute mills consume about 3.2 million bales of raw jute annually, the meeting said.
Either hoarders have stocked a large quantity of raw jute or a significant volume of the fibre has been smuggled out from the country, the meeting was told.
Besides, a portion of quality raw jute is also being exported from the country in the name of rejected grades -- Bangla 'tossa' rejection (BTR) and Bangla white rejection (BWR), defying the existing official guidelines to this effect.
Although the government has taken some steps to curb the exports of quality raw jute in the name of rejected ones, no positive result has yet been reported.
Jute millers, severely hit by raw jute scarcity, will seek the government's immediate intervention in addressing the problem for the survival of the local units.
Voicing deep concern at a sudden supply shortage of raw jute, what the millers term an 'artificial crisis', in the domestic market, they said at least 70 per cent of jute mills would face closure if the situation persists.
They believe raw jute is either being hoarded in the country or smuggled out of the country.
Against this backdrop, leaders of Bangladesh Jute Spinners Association (BJSA) and Bangladesh Jute Mills Association (BJMA) will jointly meet with the textile and jute minister shortly to seek immediate steps from the government.
The BJSA held an urgent meeting on Thursday to discuss the adverse impact of the current raw jute scarcity and find out its possible remedy.
Presided over by the BJSA Chairman Ahmed Hossain, the meeting also decided to prepare a set of recommendations to be placed to the government.
Among them, the jute millers will urge the government to carry out a thorough assessment on the current stock of raw jute at the domestic level and also suggest that the government should put a ban on export of the fibre until the assessment is completed.
"Local jute mills have been facing an immense supply problem of raw jute in recent times for running the units… if such situation continues, about 70 per cent of the jute mills will face closure," the BJSA leader said.
The price of raw jute has already jumped to Tk 1500 Tk 1600 per maund from Tk 1200 to 1250 just a couple of weeks back, the meeting observed.
"The jute mills are unable to afford such exorbitant price of their main raw material as their cost of production will abnormally go up because of it," said Mr. Hossain.
The meeting also observed that there was valid reason behind such supply shortage as the country's raw jute output was estimated at 5.5 million bales this year. Of which, nearly 0.62 million bales of raw jute were exported during the last July-October period of this fiscal.
The local jute mills consume about 3.2 million bales of raw jute annually, the meeting said.
Either hoarders have stocked a large quantity of raw jute or a significant volume of the fibre has been smuggled out from the country, the meeting was told.
Besides, a portion of quality raw jute is also being exported from the country in the name of rejected grades -- Bangla 'tossa' rejection (BTR) and Bangla white rejection (BWR), defying the existing official guidelines to this effect.
Although the government has taken some steps to curb the exports of quality raw jute in the name of rejected ones, no positive result has yet been reported.