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Jute sector burdened by credit crunch

02
Sep '09
The jute sector which was able to export jute and jute products valued at US $283 million in the previous fiscal year, is going through a severe credit crunch, right in the middle of the season when jute crops arrive in the market.

The Chairman of Bangladesh Jute Mills Association (BJMA), Mr Huq said that, “Peak season is getting over, but the government is sluggish in responding to our needs to restructure our loans and increase working capital limits”.

He added by saying that if the raw jute was not purchased now, the prices would go up by end-September, which would then reduce the competitiveness of the jute industry, vis-à-vis, neighbouring countries like India.

He said, the jute sector has faced huge losses since the last one year as demand for jute fell by 30 percent and prices by 40 percent, but demand has been slowly on the rise since March, though prices have not kept pace with the rising demand.

The representatives of the jute associations had earlier met the Jute and Textile Minister, Mr Abdul Latif Siddique and put forth the same demand and who in turn had also written to the Finance Ministry to increase credit facilities to the sector.

Industry experts decry the fact that the loss making state-owned BJMC jute mills, which has been incurring heavy losses continuously due to inefficiency, since the last few years received Tk 300 crore to buy raw jute in the current year.

Fibre2fashion News Desk - India


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