Sector people blame the Bangladesh Jute Mills Corporation -- a public corporation that manages all government-owned jute factories and industries in the country -- for jute losing its export shines as the mills under the corporation are indefinitely closed.
They also pointed out that amid rising inflation, people worldwide are now losing interest in their newfound interest during the pandemic in eco-friendly but costlier jute products.
With Bangladeshi mills closed, neighbouring India is capitalising on whatever demand remains overseas, according to industry insiders who brace for a bleak future for the "golden fibre of Bangladesh".
According to the latest data from the Export Promotion Bureau (EPB), export earnings from jute contracted by over 11 per cent in the July-October period of FY24. Bangladeshi jute and jute goods exporters received $289.70 million during this period, down from $326.47 million in the corresponding period.
EPB data also showed that foreign currency earnings from the sector were $1161 million in FY21. Since then, they have continued to decline, with the figure slightly decreasing to around $1128 million in FY22 and experiencing a significant drop in the last FY23 to $912 million.
Chairman of the Bangladesh Jute Goods Exporters' Association (BJGEA) S Ahmed Mazumder said the closure of mills under the Bangladesh Jute Mills Corporation (BJMC) has been a serious blow for the exporters.
"I would say BJMC is the primary reason for the declining trend in foreign currency earnings at a time when the country needs it the most," said Mr Mazumder.
The country was once globally renowned for producing and exporting rustic jute, as the golden-brown fibre was dubbed the "Golden Fibre of Bangladesh". In terms of usage, production and global consumption, jute is second only to cotton.
Mazumder called for better coordination among all stakeholders to sustain the country's jute sector.
Rashedul Karim Munna, a prominent entrepreneur specialising in diversified jute goods manufacturing for export, said most destination markets are currently struggling with higher living costs, which can be identified as the primary reason behind the decline in export earnings.
"Buyers in most countries are now tightening their belts when it comes to spending on less essential items, as they are focused on meeting basic needs, whereas jute products are considered luxury items," said Mr Munna, the managing director of Creation Private Limited.
During the pandemic, people showed increased interest in various environmentally friendly products, including jute goods, which contributed to a sudden growth for the country, he commented.
According to the EPB, export data is categorised into four groups: raw jute, jute yarn and twine, jute sacks and bags and other jute-oriented merchandise.
Foreign currency earnings from diversified and other jute goods experienced positive growth of around 20 per cent in the July-October period. Conversely, during the same period, earnings from raw jute declined by 29 per cent, jute yarn by five per cent and jute sacks-bags by 23 per cent.
Mr Munna said international buyers of jute yarn and twine reduced their orders due to uncertainty in the global market due mostly to the Russia-Ukraine war.
He expressed concern that the ongoing jute crisis in the international market might prolong for at least the next six months.
Bangladeshi traders receive a 12 per cent cash incentive on sacks, seven per cent on yarn, and twenty per cent on diversified goods. Bangladesh exports to around 130 destination countries worldwide.
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