Govt plans creating Tk 10b fund to boost jute output

FE Team | Published: October 11, 2017 21:49:51

The government is considering creation of a Tk 10 billion special fund to boost the production of jute for earning more foreign exchange after meeting the local demand, incorporating the golden fibre into the list of agro-products.
According to a UNB report, Prime Minister Sheikh Hasina on March 6 last officially declared that jute and jute goods will be considered as agro-based products so that this foreign exchange-earning sector could get all the benefits the country's other agro-based items get.
A process is underway to accept a proposal for increasing the cash incentive for this sector from 7.5 per cent, according to an official document.
It also mentioned that the government is actively considering creation of a special fund amounting to Tk 10 billion, like the Export Development Fund (EDF) of Bangladesh Bank, at a 2 per cent interest rate.
"The formation of the fund is underway," the document said, adding, jute and jute goods exporters can get low-interest loans from the fund.
At present, exporters producing products using imported raw materials are getting loans at only 2 per cent interest rate from the EDF.
According to officials at the Textiles and Jute Ministry, the government has taken the initiative to revive the past glory of the country's jute industry.
Bangladesh usually exports jute to India, Pakistan, China, Nepal, Germany, Korea, Brazil, Djibouti, Russia, Vietnam, Ivory Coast, the USA, the UK, El Salvador, Iraq and Iran.
The country earned US$167.84 million from exports of raw jute and US$794.58 million from jute goods in 2016-17 fiscal year while $173.17 million from raw jute exports and $746.41 million from jute goods in the fiscal 2015-16.
The Awami League-led government reopened five state-run jute mills which remained closed. These mills are -- People's Jute Mills (presently named Khalishpur Jute Mills), Quwami Jute Mills (presently named Jatiya Jute Mills), Doulatpur Jute Mills, Karnaphuli Jute Mills and Forat-Karnaphuli Jute Mills.
Of the mills, People's Jute Mills, Quwami Jute Mills, Karnaphuli Jute Mills and Forat-Karnaphuli Jute Mills were shut down on July 31, 2007 during the army-backed caretaker government.
The present government resumed the operation of People's Jute Mills on March 5, 2011 while Quwami Jute Mills went into operation again on April 9, 2011 and Forat-Karnaphuli Jute Mills in 2013.
Doulatpur Jute Mills went out of operation on December 8, 2002 during the BNP-Jamaat regime and it was reopened on January 24, 2013.
According to the official document, the government has taken steps to conduct BMRE (balancing, modernisation, renovation and expansion) of 26 jute mills which are 50 to 60 years old gradually at a cost of Tk 60 billion with the assistance of China.
The government also made it mandatory to use jute bags for packaging 17 items, including paddy, rice, wheat, corn, fertiliser, sugar, chilli, onion, ginger, potato and others under a law formulated in 2010.
"The number of items will be increased gradually," a senior official at the Textiles and Jute Ministry said, adding, the demand for jute and jute goods is increasing in the local market.
To make jute and jute goods more popular, he said, the government for the first time observed the Jute Day on March 6 this year.
"Removing various hurdles to the markets of Middle Eastern and African countries, the government is trying hard to increase the export of jute and jute goods," he said.