Govt likely to ban raw jute exports
The government is mulling a ban on the export of raw jute until August to ensure a smooth supply of natural fibre to local mills, as jute products are experiencing a gradual rise in exports after a recent slump.
“I have asked exporters not to export raw jute until the next harvest. If they do not abide by the request, we will ban exports by issuing a circular,” Textiles and Jute Minister Abdul Latif Siddiqui told The Daily Star yesterday.
“We cannot keep our mills closed by allowing the export of raw jute,” he said. "The amount of jute product exports is now rising after a significant decline in the last few months due to global recession."
However, the prices of raw jute has increased unexpectedly from Tk 1,000-Tk 1,150 a maund to Tk 1,400-Tk 1,500, only because of hoarding by traders, the minister said. Last year, the price of raw jute was between Tk 900-Tk 1,150 per maund.
Enquiring about the situation, Siddiqui said around 10-12 lakh bales of jute are still in the country, but the hoarders have created an artificial crisis to hike prices.
Representatives of the Bangladesh Jute Association, a forum of jute traders, were also present at the meeting. They said they already signed contracts to export raw jute.
“But the minister said raw jute exporters can make deliveries to the supplies when jute harvest begins,” an official said.
Meanwhile, jute millers said they are facing problems in jute production due to a sudden rise of jute price. They held a meeting with the jute minister on Monday in this regard.
“The amount of jute product exports has increased, but not the price. If the crisis for raw jute continues and prices rise even further, we will not be able to operate our mills. The hoarders are increasing prices, not the farmers," said Najmul Huq, managing director of Janata Jute Mills Ltd.
The export of jute products decreased following the global financial crisis, which prompted the government to increase export incentives to 10 percent from the previous 7.5 percent to help the ailing industry.
Of the 160 jute and jute spinning mills in the country, around 30 are closed and a similar number operate on an on and off basis, while about 100 operate normally.
Experts said the industry is important for the country because it is 100 percent value-added.
Export earnings from jute products and jute in fiscal 2007-08 were $318.34 million and $165.06 million respectively, according to Export Promotion Bureau data.
In the proposed budget, the government announced it would not close any mills. It would also mandate that jute sacks be used in packing certain commodities.
Bangladesh Jute Mills Association (BJMA) Secretary Abdul Barik Khan said these moves by the government are positive.
According to BJMA, the production of jute was 40 lakh tonnes this year, 10 lakh tonnes lower than the previous years. Around 40 percent of total raw jute is exported.
“If local mills can consume all the jute, why should we export it?” Khan said.
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