Don’t impose duty on raw jute exports

The Bangladesh Jute Association (BJA) yesterday urged the government to not impose any duty on raw jute exports as the country currently has a surplus of the fibrous material to meet the local demand following the recent closure of 25 state jute mills.

The association made this call as the government has been mulling the imposition of duties, citing a fall in jute production and a rise in domestic prices due to the ongoing coronavirus pandemic and countrywide floods.

On the other hand, jute millers have demanded a ban on exports or the imposition of a $250 per tonne duty on jute shipments this year.

On August 27, raw jute exporters had criticised the proposal in a meeting of the National Jute Sector Coordination Committee, chaired by Jute Minister Golam Dastagir Gazi.

But the association, along with the Shippers' Council of Bangladesh (SCB), has again requested the government to discard any such plan during a press conference, held at Hotel Purbani International in Dhaka yesterday.

The shutdown of state jute mills has created a surplus of jute in the market, according to a statement signed by Sheikh Syed Ali, chairman of the BJA, and Md Rezaul Karim, chairman of SCB and former BJA chairman.

The Department of Jute has reduced its jute production target by nearly 9 per cent for the current fiscal year to 84.14 lakh bales due to floods whereas the annual domestic demand is 55 lakh bales, the BJA said in a statement.

Annually, the closed government mills used to consume 13 lakh bales of jute, which will be available for use for local millers this year, it said.

Moreover, instead of paying for purchases made earlier, the closed mills returned their stored jute to their suppliers, which is also now available in the market, the BJA added.

Jute exports have decreased drastically from 28-30 lakh bales in 1984 to 8-9 lakh bales last year and it will fall further this year as many foreign jute mills closed their doors due to a lack of raw jute, the association said.

The association acquires jute from farmers and sorts those out in separate grades as per the requirement of foreign buyers. Over one lakh people work in the industry in different districts, including Dhaka, Narayanganj, Mymensingh and Khulna.

"All these people will become jobless and we will lose the export market if the duty on raw jute shipments is imposed now."

A vested quarter is now trying to stop export of raw jute, it added.

Businesses involved in the sector will have to face huge losses if they cannot export their stored raw jute and sell those in the local market.

So, the government should not stop or impose any duty on raw jute exports now for the sake of the industry, the association said.

They also wanted the government to take necessary steps to bring back the exporters who left the sector because of the losses caused by the gradual closure of foreign markets.

They proposed the inclusion of the raw jute exporters in a list of industrial sectors eligible to get financial assistance from the stimulus package announced by the prime minister following the Covid-19 outbreak in March.

The association also sought for export subsidy against shipments of raw jute.