Jute mills have stopped taking export orders owing to capacity constraints, whilst shortage of raw jute and escalating costs have place the mills in a quandary.
The 90-odd jute mills across the nation, of which 74 are in West Bengal, are currently flooded with the Centre’s order of supplying jute sacks equivalent of 24 lakh bales (each and every jute bale produces 500 sacks). The mills have supplied sacks equivalent to 14 lakh jute bales.
Average value of raw jute touched Rs 8,one hundred per quintal on Thursday, an boost of Rs 500-600 a quintal in a span of two days. Prices had been at Rs 7,500-7,600 a quintal on Tuesday.
The jute commissioner’s stock limit of holding not more than 500 quintals at a time has led to decrease inventory, greater logistics price and elevated production price, mill owners mentioned.
“Such a situation has caused the millers and the jute commissioner to lock horns,” one mill owner mentioned.
Export orders from Europe, East & South East Asia, West Asia, Africa, South America, North America and the Caribbean Islands began escalating mainly through the final quarter of FY21.
Jute merchandise valued at Rs 1,823.37 crore had been exported amongst April and December final fiscal. Had mills been in a position to accept all the orders in the final quarter, exports in FY21 would have gone considerably beyond the Rs 2,423.45 crore figure accomplished in FY20. Total exports of jute merchandise in FY21 (final figures not however compiled) are nevertheless on course to cross the FY20 figure.
“We have stopped taking orders,” Sanjay Kajaria, former chairman of the Indian Jute Mills Association mentioned. He mentioned that due to the fact order flows are beyond the mills’ capacity, the Centre has announced a Rs 2,500-crore package for not only modernisation of jute mills, but for opening a handful of closed jute mills and enabling elevated cultivation of improved excellent raw jute.