Tk 2.0b sought for BJMC to help procure jute

The Ministry of Textile and Jute (MoTJ) has sought Tk 2.0 billion in the form of financial assistance for the Bangladesh Jute Mills Corporation (BJMC) to help it procure raw jute.
The MoTJ is arranging the fund for the BJMC as it is facing an acute financial problem mainly because of a fall in export of jute goods, sources say.
Phani Bhoushon Choudhury, secretary of the MoTJ sent a letter to Fazle Kabir, secretary of the ministry of finance (MoF), seeking the fund last week.
The mills under BJMC manufacture different types of packaging fabrics, hessian, sacking, carpet backing, mats and bags which are exported to different countries across the globe.
But the export of such items declined, as the use of jute goods across the world fell significantly due to the alternatives available there, an official of the MoTJ told the FE.
"About 75,419 tonnes of jute products worth Tk 7.60 billion are stored in different jute mills across the country. The quality of the jute items is at risk, as those have long been remaining stockpiled due to the fall in exports. Besides, storing such goods is a very difficult task," he said.
Millers were passing a hard time due to the fund constraint with the export of jute products falling drastically, he said.
During the jute procurement season, both state-owned and private mills usually face financial constraints. Then the government offers financial assistance to the BJMC to help them purchase raw jute every year.
In a similar situation the Tk 2.0 billion was sought for the cash-starved BJMC, sources said.
On the other hand, the jute mills under Bangladesh Jute Mills Association (BJMA) were incurring heavy losses. The mills' performance was not satisfactory. Apart from that, the BJMA failed to meet the conditions in respect to an earlier financing, a high official of the MoF said.
Earlier, the Bangladesh Bank (BB) had provided a fund to the tune of Tk 5.0 billion to the BJMA for boosting the sector for a period of 20 years against a government guarantee, the BB data showed.
The BJMA has set a target to procure 1.2 million bales of raw jute for the FY 2013-14, according to sources.
Presently, there are 238 jute goods manufacturing units in the country. Of these, 90 private spinning mills produce jute yarn while 18 state-owned mills and 130 private jute mills manufacture hessian, sacks and bags.