The prices of raw jute have gone up after last year’s harvest and due to epidemic business losses, so small jute mills in the Rangpur division of the country’s northwest have resumed production after being closed for several months.
Out of 200 listed by Bangladesh Jute Mills Association (BJMA), 130 jute mills are operational. There are about 70 small and medium-sized mills in the northern part of the region.
The mills cater to the local market for hessian, jute bags and cloths as well as export destinations, including India.
Abul Kalam Mintu, director of Selim Agro Industries Ltd at Saidpur upazila of Nilphamari district said,The raw jute prices had reached as much as Tk 6,500 per maund (around 37 kilogrammes).
“But the price of the goods we produced did not rise proportionately, compelling us to incur losses. Under such a situation, most mills could not continue operation,” he also said.
Mintu said, “Exporting goods became difficult during the shutdown for a lack of transport and orders. We also could not operate smoothly as we had to work with a reduced workforce to comply with social distancing rules”.
Besides, in Rangpur, there are 22 small jute mills with the number of looms in each ranging from 36 to more than 400.
The mills employ 400 to 2,000 workers, said some millers in the region.
On the other hand, Bangladesh produces around 80 lakh bales of raw jute while local mills process 60 lakh bales to make yarn, twine, bags, sacks and other goods mainly for export and some domestic sales.
In fact, production fell last year due to unfavorable weather, leading to higher fiber prices.
On the other hand, the high market price of raw jute has led to unhealthy competition among stockists and most of the mills have suffered capital losses during the epidemic.
Mill sources said high bank interest rates, and a lack of government incentives, hampered their progress.
Prokash Das, general manager of Ranu Agro Industries Ltd in Nilphamari, said, “Price of raw jute is abnormally high due to unhealthy competition of hoarders but our products can’t be sold in markets at a proportionate rate and so it is difficult to run the mill smoothly.”
The jute mills, most of which have been set up with bank loans, started seeing a glimmer of hope after Adamjee jute mills was closed down in 2002 followed by others under Bangladesh Jute Mills Corporation.
Also, purchasing old looms and other machinery from some of the closed mills and importing some, the small mills initially ran with some workers of the shuttered mills. The local workforce is now gradually replacing them.
Md Shafiqul Islam, manager of Nine Jute Mill in Rangpur said, “If the government provides all of us, instead of a few, with incentives to recover from losses, it would be easier to function.”
Mizanur Rahman Swapan, owner of SR Jute Mill of the district, said three to four small jute mills have already closed down for being unable to tackle manifold problems.
Siddiqul Alam, managing director of Equ Jute Process Ltd in Nilphamari, said the government made it mandatory for using jute bags to packet rice and other commodities and if it was enforced strictly, small jute mills would get a new lease on life.
“We urge the government to allow the export of raw jute, but only after domestic requirements are fulfilled,” said Aminul Islam Mintu, director of Selim Agro Industries Ltd in Saidpur of Nilphamari.
Farhanul Huque, vice president of the Nilphamari Chamber of Commerce and Industries, said, “We’ve discussed with the authority concerned regarding problems of traders and manufacturers, particularly about small jute mills.”