Indian jute mills concerned over bag pricing formulae

03 Sep '17

2 min read

The Indian Jute Mills Association (IJMA) is concerned over the proposed new pricing formulae of jute bags adopted by the Tariff Commission 2017 that will bring down prices of the bags supplied to the government by minimum 10 per cent. The association feels if the pricing is implemented from September, several mills will turn ‘unviable’ and shut down.

The Tariff Commission recently said in its fifth report that jute bag prices are 10-15 per cent lower than the price at which the government purchases them. IJMA representatives have met jute commissioner A Madhukumar Reddy to discuss the issue, according to news agency report.

IJMA has also raised the issues with West Bengal labour minister Moloy Ghatak and wants the state government to intervene in the matter. Jute mills in the state, which accounts for more than 80 per cent of the jute production in India, directly employ over 2.5 lakh people and engage three to five lakh farmers indirectly.

The jute industry may annually lose Rs 200 crore if the new pricing is implemented. A loss of about Rs 3,000 will be incurred on each tonne. Government agencies procure jute bags at a cost of Rs 65,000 per tonne.

The jute industry's demand for fair price of jute bags has gone unheeded in the past 15 years. Each year, the government purchases around 0.7 million tonnes of jute bags through the food ministry and Food Corporation of India (FCI) valued at around Rs 8000 crore. (DS)

Fibre2Fashion News Desk – India

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