Jute exports up despite virus

Exports of jute and jute goods have maintained an upward trend amid the ongoing pandemic with earnings from the sector soaring 23 per cent year-on-year to $953 million in the July-March period of the current fiscal (FY21).

In case of jute yarn and twine, the country fetched 35 percent higher earnings at $660.72 million in the same period, according to the latest data of the Export Promotion Bureau (EPB).  

Export earnings from jute sacks and bags have also soared 23.63 percent to $116.57 million in the first nine months of FY21, said the EPB.

Millers said sales of 100,000 bales of previous stocks of jute sacks by state-run Bangladesh Jute Mills Corporation and private mills and higher demand for new carpets in the West amid increasing stays at home for lockdowns buoyed shipments of jute yarn.

"Export value has increased mainly because of prices of raw jute," said an official of Akij Jute Mills (AJM), one of the world's biggest jute yarn manufacturers in terms of processing capacity.

Prices of raw jute, the key ingredient of jute yarn, almost doubled from around Tk 2,200 per maunds (around 37 kilogrammes). And this is being reflected in the export receipts, said the official.

Citing jute yarn, which accounts for more than three-fourths of the country's export proceeds from jute and jute goods, the AJM official said average monthly shipment from the country’s premier Chattogram Port was 36,704 tonnes in 2020, up 3 per cent from that in the previous year.

"Uses of jute yarn have not increased. Uses of jute and market of jute would have increased had we been competitive in prices," he observed.

This is a record export growth in value registered by millers and exporters in recent years. Jute and jute goods exports rebounded in fiscal 2019-20 after a 20 per cent fall the previous year.

And this year, export earnings continued to stay in the positive thanks to production shortages in two major jute producing nations, Bangladesh and India, and relatively good demand for jute goods and yarn, according to jute traders. 

Just after the harvesting of raw jute in the July-August period of 2020, prices of raw jute began rising.

Prices crossed previous record highs by the end of September, 2020 amid middlemen increasing their stocks and slow release by farmers to cash in on supply shortages resulting from a flood-induced production fall.

The spiralling prices alarmed millers and they demanded that the government curb exports of raw jute to ensure increased availability in the domestic market.

Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said this has been an unusual year for the jute sector.

"It is an exceptionally good year for jute exports as shipments have not declined. Instead, it has increased," he added.

In February the raw jute prices hit a new high as the natural fibre traded for as much as Tk 5,300 per maund (one maund equals 37 kilogrammes) at local markets in Faridpur, the biggest producing district, as supply shortage became acute.

The latest data shows that prices soared 29 per cent from Tk 4,100-4,200 per maund in the third week of January, according to traders.

The Department of Agricultural Extension (DAE) estimates that farmers bagged 72.86 lakh bales last season after counting flood related losses.

Md Zahid Miah, chairman of the Bangladesh Jute Spinners Association (BJSA), said jute mills require 55 lakh tonnes of raw jute to make yarn and other jute goods.