Imports from Bangladesh aggravate Indian jute sector crisis: Stakeholders

Indian jute suppliers have begun to complain to the Indian government that imports from Bangladesh are impacting their farmers and industry, says Times of India. 

A letter to India’s Jute Balers’ Association alleges that “unregulated import of raw jute” from the Bangladesh and “low orders” for mills have led to a severe payment crisis for Indian domestic raw jute suppliers.

Indian Jute Mills Association has also raised concerns over the issue and sought intervention from the central and state governments to tide over the crisis.

A meeting between the industry stakeholders and the ministry is expected later on Monday, an official said.

The balers’ association, which has been serving the sector for over 115 years, outlined the critical issues threatening the industry’s survival,

“Despite a bumper crop year in 2023-24, where domestic supply was sufficient, mills have continued to import large quantities of raw jute from Bangladesh. In June 2024 alone, 73,000 bales, or 22 per cent of the total 3,34,000 bales, were imported,” Jute Balers’ Association secretary Pulak Jha said in the letter.

“There is an opening stock of 3 million bales of raw jute for the jute season as of July 1, 2024, and the new crop is also around the corner. These factors caused prices to plummet below the minimum support price (MSP), Jute Balers’ Association senior functionary Om Prakash Soni told PTI. 

Prices of the golden fibre fell below Rs 5,000 per quintal, while the minimum support price (MSP) is Rs 5,335 per quintal for the 2024-25 season, he said.

There has been a bar on the use of imported jute in making bags for food grain packaging but the “influx of cheaper and low-grade jute from Bangladesh has exacerbated the crisis”, an industry stakeholder said. “With mills facing liquidity issues, payments.to suppliers are getting delayed, hindering the ability to purchase fresh jute from farmers. This has created a vicious cycle, where mills are obligated to buy MSP-linked jute, which reduces their market purchases, further depressing prices and pushing more farmers. towards MSP dependency.

“Already six mills are closed. The current dues are about Rs 1,400 crore of which Rs 400 crore is legacy dues from the mills, Soni said explaining the current situation.

The association called for a rigorous crackdown on alleged illegal jute imports and a reaffirmation of commitment to lawful practices.

“The future of millions of livelihoods is at stake, the letter said, urging immediate government intervention to curb the menace of “unregulated imports” and address the issue of reduced orders.