Economics

Jute sector crosses $1b export mark

Earnings from jute and jute goods have risen significantly in the 2017–18 financial year (in the period from July to June) compared to 2016-17 on the back of products diversification, government policy, availability of quality raw materials and better crop management.

In addition, global concerns over climate have also helped open up new opportunities for Bangladesh, say industry players.

The sector has fetched export earnings of USD 1.02 billion in 2017–18 (in the July–June period), up from the USD 962.42 million recorded for the same period in 2016–17, thereby showing a growth of 6.56 per cent, according to Export Promotion Bureau (EPB) data.

Jute and its goods is the third sector that has crossed the USD 1 billion-mark in export receipts after readymade garments and leather products. So, it depicts the reduction of dependency on apparel sector as well.

Asked about the reason behind this success, HM Rezaul Karim, vice-president of the Bangladesh Jute Goods Exporters’ Association, told The Independent that the demand for jute products was growing worldwide as more and

more people were relinquishing the use of polythene and moving towards eco-friendly products.

Karim, who is also the owner of BICO Jute Fibres, said the demand for jute sacks was also rising in African countries such as Cameroon, Tanzania, Uganda, Ivory Coast, Kenya, Nigeria, Egypt, and Sudan. “They use sacks for food grain packaging,” he added.

Besides, Japan and South Korea used jute sacks for car interiors, electronic casings and other surfaces because jute fibre was 100% environmental friendly. “It is bio-degradable and recyclable as well,” he added.

Karim said his company, Bico Jute Fibres, had exported jute bags worth USD 20 million last year.

According to the Bangladesh Jute Mills Corporation (BJMC), Bangladesh produced 9.2 million bales of jute in 2017 and five million bales in 2016.

Around 240 types of products were being produced by the jute sector in Bangladesh and the average annual production was 663,000, Karim said. More than 40 million people were directly or indirectly involved in this sector, the jute exporter added.

On the challenges to the sector, Karim said the BJMC fixed the export price of jute products, but private mills did not follow the rule and sold them at lower prices. “As many as 22 government jute mills are running at this moment. The exporters don’t get any incentive from the government, but local manufacturers are enjoying 7.5 per cent cash incentive,” he complained.

Karim explained that the government had implemented “Mandatory Jute Packaging Act, 2010”, and it was enforced in 2014 so as to promote the country’s jute sector.

At first, however, 17 agricultural commodities, including sugar, rice, maze, wheat, paddy, fertiliser, among others, were to be contained in jute packaging, but only rice was delivered using jute packaging, he added.

Expressing the reasons behind the growth, Sajjad Hussain Sohel, managing director of Erans Trade International Ltd, said: “Sudan and Turkey, along with other African countries, have imported large amounts of jute and jute goods from Bangladesh in the current financial year.”

“Bangladesh is producing quality jute yarn and the demand has increased because of that. The price has also increased by about USD 500 to USD 600 per metric tonne of yarn,” he added.

Jute yarn and twine fetched USD 647.72 million—a growth of 6.55% from 2016-17, according to EPB data.

Bangladeshi jute traders were exporting an average Tk. 30-35 crore worth of jute and jute goods per year, Sohel said.

He also said jute bags should not be stacked higher than four metres and plastic bags above three metres. “Plastic bags are more slippery and the stacks are less stable. Moreover, jute bags can easily protect grains from insects and can be stored efficiently,” he added.

According to official records, the BJMC alone had produced 1.8 lakh metric tonnes of jute last year and 1.45 lakh metric tonnes this year.

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