Raw jute price jump to record highs

Jute prices have jumped to record highs due to shortages of raw jute for production at jute mills combined with high demand for raw jute in both local and international markets.

Farmers and traders said one maund of jute is currently being sold for up to Tk 6,300, which is double last year’s price. In the years prior to that, the price of one maund of jute ranged from Tk1,500-2,000. 

Around 40 mills have suspended production because of a shortage of raw jute in recent months. The government has decided to lease out all 25 state-run jute mills to the private sector. According to BJMC and ministry sources, it has been decided to lease out the mills for a period of five to 20 years through an open bidding system. The government closed all state-run jute mills on July 1 last year due to heavy losses and excessive production costs, laying off more than 50,000 workers in three categories -- permanent, temporary, and substitute.

“Jute may become even more expensive as it is still in high demand,” said Shariful Islam, a jute grower and trader in the southern Chuadanga district. He has been producing and selling jute since 2003 and is elated with the potential for high profits this year.

Azadul Islam, a farmer in Natore, said farmers sold jute for Tk1,600-2,000 per maund in 2019, but prices at bazaars of the district ranged from Tk5,000-6,000 over the last several months.

Azadul and some other farmers in Kurigram, Kushtia, and Lalmonirhat said they were planning to cultivate more jute next season in hopes of getting good prices once again.

Meanwhile, several privately-owned jute mills have shuttered production due to insufficient supply and high prices of raw jute. The closures of the private mills follow the government's decision to suspend production at 25 state-owned jute mills in July last year. There are about 2,000 privately-owned mills of various sizes in Bangladesh. The country requires about 6 million bales of jute each year for the production of yarn and various other products, as well as another 500,000 bales for household necessities. In addition, between 800,000 and 1 million bales are exported to India, Pakistan, China, and Vietnam each year.

According to the government, the jute production target for the current fiscal year was 8,414,000 bales but 7,414,000 were produced. But the BJMA said only 5,500,000 bales of jute had been produced.