The Financial Express

Restoring the lustre of golden fibre

Koyes Sohel | Published: March 30, 2018 21:58:06 | Updated: March 30, 2018 22:00:16

Restoring the lustre of golden fibre

Jute farmers of Nilphamari district were facing trouble after harvesting their bumper crop over the years. The reason was usual: they were not getting the fair price for their produce. In late January, a report published in the local media said that jute production declined alarmingly in the region.

The irony is hard to miss: while local jute growers are incurring losses and shying away from the fibre crop, the demand for jute is growing across the world because of its health benefits.

For more than a decade, the government has been working to bring back the glory of the natural fibre but it is yet to succeed as indicated by the extent of cultivation in the northern district.

The bottom line is that the jute industry revival can take place only when diversified jute products are used and when exploitation of the small and marginal farmers by the manufacturers is reduced to a minimum level. Policy deficiency and inadequate investment have also led to the jute sector remaining ailing.

Jute was once known as the golden fibre of Bangladesh, since it was the most important cash-crop for the country. But it lost its lustre in the 1980s after synthetic materials like polythene and plastics had been introduced.

With growing environmental awareness in the world, jute, which is bio-degradable, has become the preferred alternative to polluting synthetic bags.

Until today the fibre is being used mostly as a packaging material. In addition, use of the natural fibre is also growing in many sectors such as automobiles, furniture, packing and construction.

To tap the increasing demand, the government took different measures on different occasions but to no avail in the absence of proper enforcement of the law. Despite enacting a mandatory law in 2010 on the use of jute in packaging, the local demand still remained tepid for unknown reasons.

However, immediately after the law formulation, jute and jute products made a strong comeback as exports spiked. But it did not last long.

The country earned US$ 714 million from the export of jute goods during the period of July to January of the fiscal year 2017-18, a rise of more than 6.0 per cent a year earlier, according to the Export Promotion Bureau (EPB). But the earnings fell short of the target by 0.5 per cent and raw jute and jute bag export was down by over 17 per cent and 0.2 per cent respectively during the period.

Conflicts in the Middle East countries, particularly in Syria, Egypt and Iraq, have left a negative impact on jute exports. But demand in other areas has increased more than that. Globally, the jute bag market witnessed a significant growth in recent years. This can be attributed to the fact that jute is biodegradable and the market for eco-friendly products is rising rapidly in the West.

In 2014, China was making significant inroads into jute cultivation and was likely to target global market for jute-made products.

Sensing the increasing demand, the Indian government in its 2005 jute policy fixed a target to increase the earning from the sector. It has already taken the opportunity of the global demand for jute as they have established new jute mills and announced several sops for farmers. Although Bangladesh enjoys advantages in production of jute and jute goods, the country is failing to reap the benefits.

Amid the rising awareness against the use of plastic bags, especially in the European countries, the news about jute production fall in Nilphamari district is really shocking.

The diversified jute goods add value 10 times and if the country goes for product diversification, the export earnings only from jute-made shopping bags are expected to exceed US$ 1.0 billion a year. The demand for jute goods like gardening products, shopping bags, geo-textile, pulp and paper, home textiles, floor covering and non-woven textiles is very high at the consumers' level in the international market as the people realise the extensive damage the artificial fibre is doing to the environment. Of those products, jute-made shopping bags are now the best selling items.

A 2010 study by the World Economic Forum offers some hope. It observes that 95 per cent of the consumers worldwide want to go "green". To tap the latent demand, India and Bangladesh that grow 90 per cent of the world's jute need to double their production, just to supply enough shopping bags to the world. Banning carbon-intensive plastic bags in the UK alone will be akin to take 18,000 cars off the road. It's time the industry wakes up to the challenge.

Many countries like the US and the United Arab Emirates have already gone for replacement of plastic shopping bags by jute-made ones. The demand for eco-friendly bags is also increasing in Western Europe, Australasia, Middle East, Asia and African countries.

The global market size of jute-made shopping bags will be 500 billion pieces, equivalent to seven million tonnes of jute products, in the coming days, as efforts are on to totally stop use of polythene or plastic materials all over the world because of their adverse impact on environment, according to a research.

As the second largest and best quality raw jute producing country, Bangladesh can lead in the international market. Unfortunately Bangladesh is yet to take the lead in marketing this commodity in the world due to lack of appropriate policy. It is lagging behind India and China in export earnings from jute goods.

The cost of producing quality yarn is 40 per cent higher in Bangladesh than in India because of the technological disadvantages. India has set up composite jute mills with modern machinery and technologies for production of fabrics, dyeing or lamination under one roof.

There were around 120 jute mills, including 25 state-owned ones, but almost none of them has the dyeing and lamination facilities, which are essential to producing diversified products, according to exporters. In the absence of such facilities Bangladesh produce a small number of value-added jute products commercially.

There is a growing demand for jute shopping bags worth nearly US$ 100 million in the US because of the lower prices of the products which are environment-friendly. Such demand has been projected to increase 50 times within next five years, if the trend continues.

A number of American states and cities have already banned use of plastic bags in their grocery markets and shopping malls. But exporters from different countries can meet only about US$ 20 million worth of the demand for such products in the US market a year.

The US is now mainly importing jute carrier bags from China and India. But it is looking for alternative markets like Vietnam and Cambodia for cheaper bags following the wage hike in China. So it is high time to attract US buyers toward Bangladeshi jute products. As Bangladesh is one of the top jute producing countries and has cheap labour, the foreign buyers can easily be attracted to buy such products from here.

On the other hand, the UAE authority banned plastic shopping bags. So it needs 9.0 billion jute bags for the UAE shopping malls and grocery markets. The UAE authorities imposed an embargo on plastic shopping bags as such bags severely pollute the environment. The country has already started phasing out the plastic bags from their shopping malls.

But Bangladesh fails to tap the opportunities as it is not making jute shopping bags adequately. Presently those markets are dominated by India. Major shopping bag exporters are getting queries from the buyers, but they are unable to accept the orders due to shortage of capacity and raw materials.

Exporters, however, sought facilities like soft loans and government subsidy for hi-tech machinery to ensure more investments in the industry that would definitely help Bangladesh be in a dominant position in the emerging global market.

According to the official figure of the jute ministry, about 30 million people are directly or indirectly dependent on the jute sector as 3.5 million farmers are engaged in growing jute, 0.2 million people are working in jute factories, 0.1 million are engaged in jute trade, and a large number of people provide other related services.

The diversified jute product sub-sector can help additionally employ another 1.5 million people, directly or indirectly. Besides, the sector can remain stable even during any recession in the world or during any political unrest, if there are varieties of products. Product diversification using latest technology is the way forward to boost the jute production. So, it's high time to wake up to the challenges to bring back the glory of the natural fibre from the brink.

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