In the last two years, the production of jute cloth has decreased significantly. Jute textile millers cited several reasons including decline in exports and the government’s failure to impose mandatory packaging laws strictly. If this continues, experts say that several jute textile millers in the country will either be forced to close their factories or operate at reduced capacity.
Data from the Bangladesh Bureau of Statistics shows that the overall production of jute textiles in the 2021-22 fiscal year was 2.43 lakh tons, which is about 28 percent lower than the previous year’s 3.39 lakh tons. The production in the 2020-21 financial year was also 12 percent lower than the fiscal year 2019-20 of 3.85 tons.
Exports of jute products also declined last year. The Export Promotion Bureau data shows that in the fiscal year 2021-22, total exports of jute yarn and twine declined by 13 percent while jute sacks and bags declined by 14 percent.
According to industry leaders, the government is yet to make rules to make the use of jute sacks mandatory for packing products even though the relevant law was enacted a decade ago.
The government enacted the Packaging Act in 2010 to promote the use of eco-friendly jute products instead of polythene or polypropylene bags. The law would have helped if the mandatory packaging act came into effect, they believe.
Meanwhile, due to uncontrolled stockpiling by middlemen, the price of raw jute has been volatile in the last two years, leading to an increase in the price of jute products in foreign markets. Therefore, international buyers are now leaning towards cotton products considering the high price of locally-made jute textiles.
Moreover, a 2 percent source tax is imposed on millers, which works against their competitiveness in the global market by raising costs. They said that the jute industry should be saved by withdrawing or suspending this tax.
Industry leaders also fear that the ongoing Russia-Ukraine war will further disrupt exports in the coming fiscal year as the two countries are big markets for Bangladesh.
The anti-dumping duties imposed by India are also hampering the country’s exports. According to the Ministry of Commerce, on January 5, 2017, India imposed anti-dumping duties on imports of jute products from Bangladesh ranging from $19 to $352 per ton through a tariff notification.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, criticized the government’s relaxed stance regarding the packaging law and said, the jute goods did not get the expected results of the packaging law yet. If we had ensured a domestic market by enacting the packaging law, we could enjoy 80 percent of the export market.
The economist also urged the government to promote the golden fibre by implementing supportive policies as the industry was facing hurdles on both domestic and international levels.
