Due to cash crunch, Bangladesh Jute Mills Corporation (BJMC) has been failing to buy raw jute from growers at the peak harvest season and it has resulted in jute mills cutting production by around 66 percent.
The delay in fund allocation for the state-run corporation is causing productivity losses in the 23 jute mills BJMC operates.
The industry that was once the economy's lifeline in 1960-70 lost its glory due to lacklustre policy under the Ministry of Textiles and Jute.
Although the government has repeatedly said that it is trying to restore the lost glory of the golden fibre, but trends suggest it is providing lip service only.
The BJMC sought Tk 450 crore from the government to purchase raw jute until December last year but received only around Tk 80 crore.
On top of this, the corporation already owes raw jute traders Tk 420 crore.
Experts fear that the sector will suffer for the delay in procuring raw jute and farmers will also lose interest in growing it.
Production has been slashed by a fourth at Platinum Jubille Jute Mills in Khulna that employs about 3,000 workers.
"Our production is being hampered due to an acute crisis of raw jute. Our daily production has dropped to nine to 10 tonnes now from 40 tonnes," SM Muyeenuddin Karim, acting general manager of the factory, told The Daily Star recently.
Owing to declining demand in the global market, the factories have also seen their inventory rising.
Platinum has unsold finished jute goods worth Tk 75 crore, accumulated over the last couple of years, in its warehouses
The mill owes jute growers around Tk 35 crore as well, said Muyeenuddin.
Nasir Mollah, Compliance Bargaining Agent (CBA) leader at Platinum, said the mill would have to shut down if this continued. It would jeopardise the livelihoods of workers and farmers, he added.
“Some workers who work as 'bodli' [temporary workers] have already left the mill area in search of other jobs,” said Nasir.
According to farmers and traders, the peak jute season began in late July, as supplies are down by now and prices are going up.
"Usually, we purchase raw jute between July and October. But this time, we did not get the money to buy it ... If we had the money in time, we could have purchased raw jute at Tk 1500-1600 per maund,” AKM Tareque, secretary of BJMC, told The Daily Star recently.
The government has fixed the price of jute at Tk 2,000 a maund at mill gates, but the price of raw jute has increased to Tk 2100-2200 a maund.
Even if the BJMC gets the money now, it may face a shortage of raw jute as private jute mills, spinning mills, and exporters have already bought most of the good quality raw jute from the market.
The average production of BJMC-owned jute mills came down to 206.33 tonnes a day against a capacity of 600 tonnes, mainly due to the shortage of raw jute.