Even as West Bengal Chief Minister Mamata Banerjee demanded removal of the price cap on raw jute in the open market, the jute commissioner’s office on Friday said the cap was necessary because of the price rigging in the open market.
Banerjee, in a meeting with Prime Minister Narendra Modi, had sought the removal of the price cap imposed by the jute commissioner last month, since the current market-driven prices favour farmers. According to Banerjee, the Prime Minister assured her to look into the matter and asked her to meet all stakeholders.
Deputy jute commissioner Koushik Chakraborty told FE there have been no orders from the Centre on removing the price cap of Rs 6,500 a quintal on open market operations.
Although the Indian Jute Manufacturers Association ( IJMA) is in favour of removing the price cap, Chakraborty said prices needed be kept stable since the costing of sacks is determined on the basis of three months’ moving average of the market price of raw jute. The Centre provides 100% subsidy to procure jute bags, and price per sack works out to around Rs 80 at present against Rs 58-60 before the pandemic.
He said there is no reason for raw jute prices to increase, since production during the current season has been 90 lakh bales as against 55 lakh bales in the last jute season. The Commission for Agricultural Costs and Prices has estimated production cost at Rs 2,832 a quintal and provided an MSP of Rs 4,500 a quintal. “Open market prices at Rs 6,500 a quintal are hugely profitable, and this is where we brought in the cap,” Chakraborty said.
Landed raw jute price in Kolkata during August-September was Rs 5,800 a quintal and the upward movement is alleged to be because of price rigging by a section of non-registered stockists.
An IJMA member on the condition of anonymity, said despite the price cap, raw jute is being sold at Rs 7,300-7,500 a quintal, but millers will get sack prices on the basis of the capped price.
State government sources said the jute commissioner, chief secretary and IJMA officials met on Friday to discuss the issue, but could not arrive at a conclusion.