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Record high jute prices please farmers, exports soar 40pc

| Updated: October 15, 2020 19:46:56


Record high jute prices please farmers, exports soar 40pc

Saiful Islam, a farmer from Kumargacha Village in Pabna’s Chatmohor Upazila, is aroused by the high price of jute amidst the doom and gloom of the coronavirus crisis.

Saiful planted jute on seven bighas of land this year and harvested about 50 maund or roughly 37 kgs.

“I needed the money so I sold it off around a month ago for Tk 2,600 per maund,” he told bdnews24.com.

“Never before have I got such a high price for jute,” he added, a mixture of surprise and excitement in his voice.

Good quality jute is selling for Tk 3,000 per maund at markets across Bangladesh.

Even the low quality jute costs now more than Tk 1,500 - the highest price for jute ever seen in Bangladesh.

“The price has hit Tk 3,000,” Saiful said. “But I've no regrets. I'm happy to have sold my stock for Tk 2,600 a maund in these troubled times.”

Encouraged by such high profits, many farmers like Saiful have set their sights on growing more jute in the coming season.

But the good news is not just limited to the price of jute alone. The exports of jute and jute products have proceeded apace during the pandemic.

Not all are happy, though. Jute mill owners are moaning about the 'abnormally’ high price. They say it is difficult to be competitive in jute products when costs are so high.

According to the Department of Agricultural Extension, jute is farmed on approximately 700,000 to 800,000 hectares of land in Bangladesh. About 8 million bales of unprocessed jute is derived from the cultivation.

Jute is cultivated in every district to some extent. But Faridpur is the largest producer, devoting 84,000 hectares to the crop. Last season, they planted jute on 80,000 hectares.

The district has 19 jute mills, 13 of which are currently in operation.

The south-central district is home to Karim Jute Mill, one of the largest in the country, as well as Partex Group’s Partex Jute Mill.

Faridpur District Department of Agricultural Extension Deputy Director Hazrat Ali told bdnews24.com on Monday that the jute season had drawn to a close. Those who need money urgently are selling, but many are maintaining their stock in hopes of an uptick in price.

The price of good quality jute is currently Tk 2,900 to Tk 3,000 per mon at markets in Faridpur, he said.

Even lower quality jute is selling at Tk 2,500 to Tk 2,600.

“Jute farmers are delighted by the high price this season. Many are coming to us to discuss planting more jute next season.

This season jute was planted on about 36,016 hectares of land in the Manikganj district.

Manikganj Department of Agricultural Extension Deputy Director Abdul Quader told bdnews24.com that the high price of jute has maintained the high spirits of farmers despite the ongoing pandemic.

“Everyone was worried they would be unable to get a good price because the state-run jute mills have shut. But in reality it has been the opposite,” he said. “I have never seen such a high price for jute in my lifetime. People are happy when their hard work in the fields pays off.”

Agricultural economist M Asaduzzaman believes the high price of jute is a positive development.

“The market for jute exports has always been good, but we have not been able to capitalise on it due to the closure of large jute mills like Adamjee and other wrong decisions.”

“But this pandemic period has shown the potential of jute and jute products in the export market. Now all that’s left to see is whether we can take advantage of this opportunity.”

Asaduzzaman, who is a researcher at the Bangladesh Institute of Development Studies or BIDS, said: “Farmers, excited by the high price, could increase jute production for the next season only to be disappointed. They could then cut back the following season. We must not allow this to happen.”

Farmers from the seven Upazilas of Manikganj visit the Ghior market to sell jute. Photo: Mostafigur RahmanAccording to the government’s agricultural information service, there are currently 4 million jute farmers in Bangladesh. The jute sector makes 0.26 per cent of Bangladesh’s total GDP and 1.4 per cent of the GDP in the agriculture sector.

JUTE MILL OWNERS UNHAPPY

Private jute mill owners say that the high price of jute will prevent it from capturing the export market.

Bangladesh Jute Spinners Association Chairman Zahid Miah told bdnews24.com”

“You can’t even buy jute any more. Everyone is hoarding it in hopes of selling high later.”

“Everyone from farmers to traders are hoarding jute. Even imams and teachers from schools and colleges are hoarding it in hopes of a payday. I’ve never seen such instability in the jute market in my life.”

Karim Jute Mill owner Miah said: “It is true that there has been good growth in the jute industry and in jute product exports despite the pandemic. But everyone should keep one thing in mind – if jute prices are high then we have to produce and export jute products with that jute. This raises production costs substantially. But the prices of exports have not risen.”

“This means our mills are taking losses. And you can’t keep mills running on losses.”

For this reason private jute mill owners wrote a letter to the prime minister on Sept 18 calling for her to halt imports of raw jute and the implementation of the 2014 stock law.

“We hope for a positive response soon,” Miah said. 

JUTE EXPORTS JUMP

According to the export earnings update put out by the Export Promotion Bureau, or EPB, on Sunday, Bangladesh earned Tk 307,550,000 from jute and jute product exports in the first quarter (July-September) of the current 2020-21 fiscal year.

This is a 39.26 per cent jump from the same period in the previous year and 12 per cent higher than targets.

The jute sector earned $882.3 million in the previous fiscal year to surpass the $797.6 million earned by the leather industry and become Bangladesh’s second biggest export sector following the readymade garments industry. It is on track to repeat the feat this year.

A boat on the Kaliganga river in Dhaka’s Keraniganj is loaded with jute sticks that were once used as fuel and fencing material. Now particle board is made of jute sticks and its ashes are exported. Photo: Abdullah Al MominA boat on the Kaliganga river in Dhaka’s Keraniganj is loaded with jute sticks that were once used as fuel and fencing material. Now particle board is made of jute sticks and its ashes are exported. Photo: Abdullah Al MominAccording to Karim Jute Spinners Limited Managing Director Zahid Miah said that a range of jute products are being exported in addition to the traditional jute sacks, sandals, bags and jute yarn.

“The demand for jute products has begun to rise amid the COVID-19 pandemic as environmental issues come to the fore. If we can take advantage of this we can increase exports substantially. We may be able to revitalize this traditional industry in this pandemic year.”

But an integrated initiative is necessary to ensure exports will continue to expand, he added.

According to the EPB’s statistics on the first three months of the year, export earnings on jute yarn was $210,820,000, an increase of 53.64 per cent. Raw jute exports were $41.15 million, a 23.61 per cent increase over the same period last year.                     

Exports of jute sacks, sandals and bags earned $35.19 million, an increase of 38.33 per cent. Handmade products made from jute and jute yarn earned $32.92 million, a 18.63 per cent increase.

Other jute exports earned $20.39 million.

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