India Capturing Jute Market from Bangladesh

19 September 2003

Bangladesh is fast losing its export market in the jute sector. India, on the other hand, is capturing Bangladesh’s place in this sector, according to Bangladesh jute goods traders.

""Our jute mills have not been getting any protection from our government, whereas the Indian government has highly protective regulations for its jute industry. The Indian Jute Compulsory Use Act facilitates the sales of jute bags in their local market by imposing restrictions on the use of all other packaging materials for grains,"" said Bangladesh Jute Goods Association (BJGA) Chairman Shahedul Islam Helal.

The country""s jute goods exporters, already facing a continuous downward trend in business, forecast further fall in the country""s export volume in absence of ""supportive action"" by the government.

Many skilled professionals in the jute goods sector have retired, leaving a very few expert hands to man the offices. Shahedul Islam Helal said the total export volume of the association""s 240 members had drastically fallen in the last few years and the jute goods market was being taken over by Indian jute goods and synthetics.

Bangladesh has been exporting ‘raw jute’ and ‘jute goods’ since long. Its exports of jute goods include all types of grain-bags, sackings, sugar-bags, cocoa- bags, burlap-bags, burlap-cloths, hessian-cloth, jute-yarn, jute-twine, carpet-backing-cloth (CBC), geo-soil, soil-savers, jute-webbing, jute-braid, jute-handicrafts, jute-handbags, jute-furniture made of jute and plastics. Jute goods are absolutely environmental-friendly and pollution-free products.

Before the closure for the Adamjee Jute Mills for becoming a drain on the national exchequer it used to account for around 30 per cent of the total production of the jute mills in Bangladesh. However, four new jute mills have so far been set up in India after the AJM wound up its production.

Sources said the production loss after the closure of the Adamjee Jute Mills is now being taken care of by the Indian mills. The AJM had two specialised production lines - geo-jute and jute canvas. ""None of the other mills in Bangladesh has such facilities. BJGA members bemoan that its (Adamjee) machinery were not transferred to other mills before its closure,"" said Helal.

The jute sector, as a traditional export sector with hundred per cent retention of export value, needs some supportive measures in the form of special incentives by the government, according to some private jute mill owners.

One-third of the earnings from the country""s annual export of jute and jute goods, comes from jute yarn export.

In the present context, any disruption because of any improper policy may severely affect this sector, too.Globally, new products made of natural fibre like jute have drawn the attention of all in today""s environment-conscious world.

Thus, Jute Reinforced Plastic (JRP) is widely used to pack tea and fruits especially for its excellent ""breathing qualities"", the sources noted while pointing out that JRP can effectively be used for packing garments, cement, fertilisers and other products as well. Geo-jute, the sources further said, has been developed to control erosion of mountain slopes, canal banks etc.

It also helps vegetation to grow naturally, they observed while stating that jute has also proved to be a replacement of wood in many cases.Jute goods have been produced in the jute mills by treating raw jute with both mineral oil (hydrocarbon) and vegetable oil (food grade). The array of products now being manufactured from jute are endless. From fine silk, finished fabrics and versatile furnishings to intricately - designed oriental carpets - jute makes them all.

However, entrepreneurs involved in the country""s jute industry are unhappy over lack of proper steps in this fiscal""s budget to meet the needs for exploiting the potential of the diversified uses of jute. While the Indian jute industry is becoming more and more profitable due to pro-active policy supports provided by the government, the situation in Bangladesh is completely reverse, they pointed out. The average total production of raw jute in Bangladesh is around 900,000 tonnes per year with a total estimated value of Tk 7.0 billion (700 crore). About five million farmers are directly engaged in jute cultivation. Giving a comparative situation, the concerned circle claimed, 67 out of 73 private jute mills in India are profitable while in Bangladesh not more than five mills are running on profit. The Indian mills sell 80 per cent of their production in their domestic market following a strong government support, but 80 per cent of Bangladesh""s jute industries have to look for the overseas markets for 80 per cent of their products and the remaining 20 per cent can only be sold in the domestic market.

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