THE shipment of jute and jute goods from Bangladesh has come to a halt owing to higher prices of raw fibre and unprecedentedly high freight costs. Jute millers fetched $212 million in exports in the first quarter of the current fiscal year, down 31 per cent year-on-year. Raw jute prices in the local market have remained at an elevated level while container freight cost shot up nearly 10 times to $18,000-$19,000 because of the global container crisis in the last year. The fresh blow for the industry comes several months after export earnings from jute and jute goods hit $1.16 billion in the fiscal year 2020-21, the highest on record, driven by a higher price of raw jute and an increased demand. Millers say buyers are slashing orders against the backdrop of spiralling prices of the natural fibre, which hit a historic high of more than Tk 5,000 per maund in February this year owing to higher demand for exports and a decline in crop production in the previous season.
The rising container freight charges worsened the situation for jute mills, which make yarn, twine, bags, sacks and other jute goods for mainly the export markets. Supported by favourable weather, farmers in Bangladesh annually grew roughly 80 lakh bales of jute over the past five years. Fresh harvest of raw jute has arrived in the market, but the raw jute is selling at Tk 2,500-Tk 3,100 per maund. The prices are still high, and international buyers are switching to alternatives of jute goods. Jute yarn accounts for two-thirds of export earnings from jute and jute goods. The product is used in carpets, and carpet makers in Turkey are the main buyer for yarns produced in Bangladesh. But many buyers are using recyclable cotton for carpets.
Yarn and twine makers were the hardest hit as their export receipts plummeted 40 per cent year-on-year to $127 million from July to September. When the natural fibre is getting popular globally, we are not focusing on the development of jute, though our lands are perfect for growing the best quality jute. The government should stimulate farmers to produce jute, and exporters should search out new destinations to earn foreign currency. Returning to the golden era of jute products require strategic planning and actions.
