Jute prices hit record high

The price of raw jute has hit a record high this harvesting season due to growing demand both at home and abroad.

Farmers are happy with better prices, but jute factories are struggling as traders are hoarding large volumes of raw jute. Prices may even cross the record set in 2001, they say.

In major jute-producing areas such as Pabna, Tangail, Rajbari, Faridpur, Gopalganj, Shariatpur, and Madaripur, raw jute is selling at Tk 4,000-4,300 per maund (37.32 kg)-an all-time high for any harvesting season.

Md Atiar Rahman, a farmer and part-time rickshaw driver from Pabna, says he sold jute from his five bighas of land at Tk 3,800-4,000 per maund in mid-August.

Including the sale of jute sticks, he made a profit of about Tk 15,000 per bigha.

"Last year, I cultivated eight bighas, but this year many farmers reduced their jute land areas. Prices have now gone above Tk 4,200 in local markets," he said.

He also has mentioned that seasonal traders (farias) were buying large amounts on behalf of big traders and exporters.

Bangladesh Jute Spinners Association (BJSA) president Tapas Pramanik has told the FE that while it is good news that farmers are getting fair prices, a large share is being stockpiled by traders to push prices even higher.

He says factories will need at least 6.5 million bales of jute this year, but production seems unsatisfactory.

According to him, BJSA alone needs 3.5 million bales, the Bangladesh Jute Mills Association (BJMA) requires 2.0 million bales, while another 1.0 million bales are used locally for ropes and other products.

Although the government estimates production at 7.5 million bales, he believes the actual figure is closer to 6.0 million bales.

Another jute mill owner says a large portion of raw jute has already been exported to India through sea routes.

"Raw jute is being unloaded in Mumbai. Indian traders are importing heavily, and they are also funding Bangladeshi middlemen to secure supplies for their factories," he says.

On the other hand, India has restricted Bangladesh jute goods through antidumping duties and through ban on land ports for Bangladeshi jute products, he says.

Former BJSA chairman Md Zahid Mian suggested that the government impose an export ban to ensure local factories get enough raw materials.

He warns that if the current trend continues, prices may exceed the 2021 record of Tk 6,200 per maund, which caused severe problems for jute goods manufacturers.

During that time, polypropylene yarn gained more popularity as buyers shifted away from expensive jute products, he says.

He says regenerated cotton yarn use in carpets has also increased, as cotton rugs are easier to fold.

"We lost around 30 per cent of our market in FY21 and FY22, and exports have been falling since then. To increase exports, we need to regain our traditional buyers," he says.

Data from the Export Promotion Bureau (EPB) shows that jute and jute goods exports have been declining since FY'22.

Export earnings from the jute sector was $1.16 billion in FY21, then dropped to $1.13 billion in FY22, $911.51 million in FY23, $855.23 million in FY24, and finally $820.16 million in FY25.

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