Raw jute shortage deepens despite limited exports

Even with the government's recent restrictions on export of raw jute, the commodity has almost disappeared from local markets, leaving mills struggling to find supplies.

After prices surged sharply in August and September, the government imposed limits on raw jute exports following the main trading season.

Farmers had previously received fair prices -- Tk 3,400-3,700 per maund from August to mid-September -- but rates have now soared to Tk 4,300-4,500 per maund, according to the Directorate of Jute (DoJ).

This sudden price spike and market shortage is alarming for jute mills, which are ready to start production. Many factory owners describe the situation as the worst in years, with raw materials drying up despite it being the peak jute season.

The Bangladesh Jute Spinners Association (BJSA) held an emergency meeting last week along with the Bangladesh Jute Mills Association (BJMA) to discuss ways to tackle the raw jute crisis, unstable prices, and limited supply.

BJSA Chairman Tapas Pramanik told The Financial Express that there is unhealthy competition to hoard jute. "Genuine mill owners cannot buy enough jute to meet their production needs. This instability has thrown the jute industry into deep trouble."

Former BJSA chairman Md Zahid Mian said if the current trend continues, prices could surpass the 2021 record of Tk 6,200 per maund, when the country lost 30 per cent of the market.

"During that period, polypropylene yarn gained popularity as buyers shifted away from expensive jute products. The use of regenerated cotton yarn in carpets has also increased, as cotton rugs are easier to fold," he added.

Another miller claimed that many people, including multiple family members, were obtaining new licenses just to hoard jute. "This must stop," he said.

"Under Section 17 of the Jute Act, no one can store more than 1,000 maunds for a month. But millions of maunds have been hoarded over the past two months. The law is not being enforced."

BJMA Chairman Abul Hossain said, "The jute sector needs infrastructure improvement and corruption control. The government should form a modern data centre and a dedicated jute commission, similar to those in neighbouring countries."

He also urged the government to set a fixed minimum price for raw jute, as is done for other crops, and ensure prices match production costs.

"Otherwise, it will be difficult to survive in export markets," he warned.

"If mills remain without jute, millions of workers will lose jobs, production will halt, and Bangladesh will lose foreign exchange earnings," said BJSA Chairman Tapas Pramanik.

Both BJSA and BJMA have demanded a complete ban on raw jute exports until the domestic market stabilises.

Meanwhile, data from the Export Promotion Bureau (EPB) show that jute and jute goods exports have been declining since FY21.

Export earnings from the sector were $1.16 billion in FY21, $1.13 billion in FY22, $911.51 million in FY23, $855.23 million in FY24, and $820.16 million in FY25.

tonmoy.wardad@gmail.com