Jute sector requires investment for modernization and product diversification

Akhi Akter       
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Bangladesh observed the National Jute Day for the first time with a motto ‘Golden fiber, Golden Country, Jute goods of Bangladesh’ on 6 March 2017 to make jute goods popular to all. There is no doubt that the labor-intensive jute sector is contributing inclusively to the socio-economic development of the country, but it could donate more if Bangladesh government and jute millers would be more conscious from the ‘golden time’ of jute industry.

Before 1980s, jute fiber was called golden fiber in Bangladesh as the country earned the largest portion of total export revenue from this sector. Even in 1900-1, the export value of jute manufactures accounted for nearly a third of the entire export trade of Bengal. However, it started to lose its shine in the 1980s while synthetic materials like polythene and plastics were introduced. For widespread use of synthetic bags like polythene bags, the demand for jute declined and many jute mills were shut down, including Bangladesh’s first and largest Adamjee Jute Mills. Now the jute industry is facing huge competitiveness in global market as the jute goods produced by our jute mills cannot yet meet the demand of global market properly. Machineries quality, that are used in jute mills, is poor, so value added products and yarns are not producing. Now Bangladesh faces a great slow down of exporting jute products, yarns and twines. Only raw jute export, which is very cheap and not so profitable, is increasing.

Table 1: Jute yarn and twine export (First five months performance)
Year Export value target % (decrease)
2016-17 220.73 Million USD 227.82 Million USD 3.11%

Source: Ministry of Textiles and Jute

Table 2 shows that Bangladesh in the 2015-16 fiscal year earned $919.58 million from jute and its goods, which is 11.52 percent higher than the last fiscal year.

Table 2: Jute and jute goods export  (FY)
Year Export value  (USD) %(increased)
2014-15 868.53 Million 11.52%
2015-16 919.58  million

Source: Export Promotion Bureau (EPB)

Bangladesh’s total jute production is 10-12 lakh tonnes per year, of that 80 percent are exported and remaining 20 percent is consumed by the local market. According to EPB, export of raw jute is increasing but jute goods export is declining. July-December period in 2015-16 fiscal year raw jute export increased more than 41.33 percent of target where exports of jute yarn, twine, bags and sacks were down by around 20 percent.

However, chance is remaining for jute industry to become ‘golden fiber’ like previous time, as there are several opportunities in front of the industry. If Bangladesh could capture the chances than jute sector might get a bright future, which is boost the sector.

Due to the recent developments in jute cultivation, processing and end use it well known to all that now the natural fiber has made a spectacular comeback and jute is considered to be the second most important natural fiber after cotton in terms of cultivation and usage. Bangladesh is second in jute cultivation in the world. In one hand, increased demand of jute as natural fiber amplifies Bangladesh’s jute export; on the other hand, it creates a great opportunity to produce regenerated cellulose fiber used jute as a raw material. Every year Bangladesh imports viscose fiber (regenerated cellulose fiber) worth about tk 700-800 crore as 50-60 spinning mills use viscose fiber. If viscose can be produced inside the country, then mill-owners will be benefited. According to the ministry, about 33 thousand 737 tons viscose were imported by Bangladeshi spinning mills last year, which market value was about 650 crore taka. If viscose is produced in the country then they need not to import, rather they can be exported. In fact, it will be a major breakthrough for the textile sector.

Several researches already showed that paper could be made from soft jute fiber. However, the usage of jute fiber should be increased in agro-textile, technical textile and home textile as well as scientific method should be introduced in jute cultivation. India is meeting 50% global demand of jute fabric. Bangladesh should concentrate on jute fabric export as well.

In a world where sustainability and eco-friendliness have been discussed jute could replace many usages of plastic or synthetics products. Already plastic bags were announced banned in many countries including Germany, France. Bangladesh is the first country in the world to ban thinner plastic bags. In 2010, the grocery market of UK was worth 150 billion Euros, which is increasing daily, where jute shopping bag could be used.  As a natural fiber jute has a great domestic and global demand for its many inherent advantages like lustier, high tensile strength, low extensibility, moderate heat and fire resistance and long staple lengths. It is a biodegradable and eco-friendly fiber, which has many advantages over synthetics and it protects the environment and maintains the ecological balance. Bangladesh needs to make value added jute goods, diversify product as well as market to boost the industry.

Bangladesh needs comprehensive research on jute and its use.  Jute sector will grow rapidly if effective result oriented research could be done. To diversify jute products Bangladesh needs to invest in making value added products from jute. The country is greatly cotton import dependent and it has no strong research on how to reduce this dependency by using jute. Now the whole textile sector is having higher risk than other competing Asian countries and Vietnam. Proper research could help Bangladesh textile industry as well as jute industry to survive steadily in global arena.

For diversifying jute goods to meet the global demand and expanding markets for Bangladesh it needs modern technology and machineries.  At present jute millers are using very poor quality machineries which failed to produce quality products. Government should make big budget as millers could purchase right machineries for reviving this sector.

Atmosphere of Bangladesh is very suitable for jute cultivation and labor cost is very low. Therefore, it is easy to attract Foreign Direct Investment (FDI) for the sector, which will help to expand the sector and reduce unemployment problem.

Already Bangladesh government has taken some measures to promote the sector. The government made the use of jute bags mandatory for 11 more products to boost domestic use of the golden fiber after the imposition of anti-dumping duty on jute goods imported from Bangladesh by India. The government has made the use of jute bags compulsory in the preservation and transporting of 20 kg or more of commodities like onion, ginger, garlic, pulses, potato, flour, chilli, turmeric, coriander seeds and husks of rice and wheat. In a similar order, government has also made use of jute bags mandatory for six products like paddy, rice, wheat, corn, fertilizer and sugar.

Bangladesh Jute Mills Corporation (BJMC) has taken a 7 billion Taka ($0.09bn) project to manufacture diversified products, which will begin soon, according to Mirza Azam, state minister for textiles and jute. This action is highly appraisable but more actions required to the proper development of the sector.

In conclusion, further investment is required in traditional jute mills. Efficiency, modernization and product diversification are very important for competitiveness and sustainability. Therefore, Bangladesh government should take proper plan, strategy and action to revive the jute industry.

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