Jute mill owners face capacity constraints to take export orders

By: |
April 9, 2021 3:30 AM

Export orders from Europe, East & South East Asia, West Asia, Africa, South America, North America and the Caribbean Islands started increasing mostly during the last quarter of FY21.

“Such a situation has caused the millers and the jute commissioner to lock horns,” one mill owner said.“Such a situation has caused the millers and the jute commissioner to lock horns,” one mill owner said.

Jute mills have stopped taking export orders owing to capacity constraints, while shortage of raw jute and escalating prices have put the mills in a quandary.

The 90-odd jute mills across the country, of which 74 are in West Bengal, are already flooded with the Centre’s order of supplying jute sacks equivalent of 24 lakh bales (every jute bale produces 500 sacks). The mills have supplied sacks equivalent to 14 lakh jute bales.

Average price of raw jute touched Rs 8,100 per quintal on Thursday, an increase of Rs 500-600 a quintal in a span of two days. Prices were 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 lower inventory, higher logistics cost and increased production cost, mill owners said.

“Such a situation has caused the millers and the jute commissioner to lock horns,” one mill owner said.

Export orders from Europe, East & South East Asia, West Asia, Africa, South America, North America and the Caribbean Islands started increasing mostly during the last quarter of FY21.

Jute products valued at Rs 1,823.37 crore were exported between April and December last fiscal. Had mills been able to accept all the orders in the last quarter, exports in FY21 would have gone much beyond the Rs 2,423.45 crore figure achieved in FY20. Total exports of jute products in FY21 (final figures not yet compiled) are still on course to cross the FY20 figure.

“We have stopped taking orders,” Sanjay Kajaria, former chairman of the Indian Jute Mills Association said. He said that since 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 few closed jute mills and enabling increased cultivation of better quality raw jute.

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