July exports of jute and jute products rebound strongly

The exports of jute and jute goods rebounded strongly in July of FY2019–20 compared to the previous fiscal year 2018–19 on the back of the diversification of jute goods, a robust government policy framework, availability of quality raw materials and better crop management, said industry insiders.

In addition, the world is more concerned about climate change, which has helped open up new opportunities for Bangladesh, added industry players.

The jute and jute goods sector fetched export earnings of USD 74.88 million in July of the current fiscal year (2019–20). This was up from the USD 74.26 million recorded for the same period in the previous financial year, thereby showing a steady growth of 0.83 per cent, according to data from the Export Promotion Bureau (EPB).

Jute and jute goods is the third sector to have crossed the USD 1 billion-mark in export receipts after readymade garments and leather and leather products. Hence, it also depicts the reduction in dependency on the apparel sector.  

When asked about the reason behind such growth, HM Rezaul Karim, vice-president of the Bangladesh Jute Goods Exporters' Association, told The Independent that worldwide, the demand for jute products is rising as more people are relinquishing the use of polythene and are moving towards an eco-friendly product.

Rezaul Karim, who is also the owner of BICO Jute Fibres, said the demand for jute sacks is also rising in African countries like Cameroon, Tanzania, Uganda, Ivory Coast, Kenya, Nigeria, Egypt and Sudan. They use sacks for packaging food-grains.

Besides, countries like Japan and South Korea use the golden fibre in car interiors, electronic casings and other surfaces because jute is 100 per cent environmentally friendly. It is not harmful for the environment at all and is bio-degradable and recyclable.

When asked about the volume of exports, he replied Bico Jute Fibres exported jute bags worth USD 20 million last year.

“Last year, we exported 80 containers of jute products; each container holds 16,000 jute sacks. So, a total quantity of 12,80,000 jute sacks was exported last year,” he added. According to BJMC, Bangladesh produced 9.2 million bales of jute in 2017 and this figure was 5 million bales in 2016. Some 240 types of products are being produced by the jute sector in Bangladesh. The average production of jute goods is 663,000 per year.

More than 40 million people are directly and indirectly involved in this sector, he said.

Describing some challenges, he said the BJMC fixes the export price of jute products, but private mills do not follow the rule. They take advantage of it and sells them at a lower price.

A total of 22 government jute mills are running and fully active at this moment. Exporters do not get any incentive from the government but local manufacturers are enjoying 7.5 per cent cash incentive from the government.

He noted that the government implemented the Mandatory Jute Packaging Act 2010, which was later enforced in 2014, in order to promote the country’s jute sector.

However, at first, 17 agricultural commodities, such as sugar, rice, maize, wheat, paddy and fertilizers, are supposed to be contained in jute packaging, but only a single commodity (rice) is delivered using jute packaging, he added.

Explaining the reasons behind the growth, Sajjad Hussain Sohel, managing director of Erans Trade International Ltd, told The Independent that Sudan and Turkey have produced a large amount of crops this year. As a result, these two countries, along with other African countries, have imported more jute and jute goods from Bangladesh this year.

Bangladesh is producing quality jute yarn and, because of that, the demand has increased. The price has also increased by about USD 500 to USD 600 per tonne of yarn, he said.

Jute yarn and twine fetched USD 50.08 million and registered a growth of 7.28 per cent compared to the financial year 2018–19, he said.

Bangladeshi jute exporters are exporting jute and jute goods on an average worth Tk 30–35 crore per year, he said.

Describing the advantage of jute bags, Sohel said jute bags should not be stacked higher than 4 metres while stacks of plastic bags should not exceed 3 metres.

Plastic bags are more slippery and the stacks will be less stable. Also, jute bags can easily protect food-grains from insects and can be stored efficiently, he said.