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Jute industry is loosing its Intl dynamism

27 Feb '08
2 min read

Bangladesh which had a monopoly market of raw jute and jute goods like bags, sacks and yarns for a long time, is likely to lose its export markets to India and China.

In the recent years, both these countries have been importing raw jute from Bangladesh just to re-sell it as finished value added goods in the international market. Pakistan, Ivory Cost, Russia, Indonesia and Thailand have also followed the footsteps to join the group.

A major reason behind Bangladesh's deplorable state can be attributed to the closure of innumerable state-owned, jute-producing mills. Currently, there are only four to five mills in the private sector, which cannot be counted for meeting the huge domestic demand of 25 lakh bales per year.

Another factor being lack of adequate foreign currency for exporting finished products instead of raw jute.

Export price of raw jute is around Tk13,000 a ton, but once turned into finished product, its value becomes more than double to reach Tk35,000.

Bangladesh exported raw jute worth US $82 million during the July-December period of this fiscal year, which was 13.18 percent higher than the $72 million exports made during the corresponding period in the last fiscal year.

In contrast, jute goods export declined by about $2 million to touch $166 million in the first half (till December) of the current fiscal year.

While China has imported raw jute worth $9.12 million from Bangladesh during July-December of fiscal year 2007-08, India imported $13.72 million worth of the same.

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