Four jute mills – Delta, Hanuman, Wellington and Budge Budge – in West Bengal have stopped operations due to shortage of raw jute. It is being estimated that 25 more are at the brink of closure.
Despite fresh government orders and the industry’s commitment to supply 7.3 lakh bales equivalent of jute sacks between April and June this year to the state food procurement agencies and the Food Corporation of India, millers fear that the industry will fail in keeping its commitment.
The shortage of raw jute is to the extend of 5-7 lakh bales but the crisis has been aggravated with the Jute Commissioner’s (JC) office mismanaging supplies and failing to control prices. Raw jute prices are at the level of Rs 8,000 per quintal at present. Further, the JC’s recent raw jute stock holding order for 72 jute mills have left the jute millers in a quandary since the specified stock limit for each of the 72 jute mills doesn’t exceed more than a month’s stock, according to the Indian Jute Mills Association (IJMA).
IJMA has already urged the jute commissioner to withdraw the latest order restricting raw jute stock or ” the jute industry will heavily fail in its commitment for supply of jute sacks, thereby defeating the very purpose of reservation of packaging food grains in jute bags as mandated under the JPM Act 1987,” Roy stated in a written communication to JC.
The letter also states that the earlier order in January this year, “has failed to elicit desired effect due to actual shortage of raw jute during the crop year 2020-21”. The JC’s January order while specifying stock limit for each and every jute mill of the country’s 72 jute mills, also asked the jute mills to file weekly stock returns instead of monthly stock returns to prevent brisk buying.
When the Jute Commissioner issued fresh orders in January this year, average raw jute prices were hovering at around Rs 6,100 – Rs 6,200 a quintal but now prices are above Rs 8,000 a quintal.