- Jute export earnings reached Tk10,000crore in FY21
- Earnings broke all records of the previous 12 years
- This was achieved despite raw jute production declining in the country
- 282 jute goods currently exported to 135 countries
- Jute, jute goods exports crossed $1 billion four times in the last 12 years
Farmers have gradually grown disinterested in cultivating jute over the last few years due to a lack of fair prices, but against all odds, Bangladesh's golden fibre fetched a record $116.14 crore from exports in FY2020-21.
The earnings – which broke all records of the previous 12 years – has reignited Bangladesh's hopes of turning jute and jute-based goods into a viable source of export revenue. This was achieved despite the fact that the production of raw jute had declined in the country.
Alongside jute fibre, the country is presently exporting jute yarn, twine, sacks, bags, man-made filaments and staple fibres. Especially, the export of jute yarn, twine and diversified jute products have gone up, industry insiders have said.
Last year, the Jute Diversification Promotion Centre – operating under the Ministry of Textiles and Jute – had released a list of 282 diversified jute products last year.
Of the list, Bangladesh is already exporting products such as bags, baskets, shoes for men and women, mats, jewelry, suits, sweaters, toys, wedding accessories, sarees, jute denim, shirt, panjabi, vests, and garments made out of jute fabrics, jute-cotton fabrics, fibres and yarn.
Addressing the gradual decline in raw jute production, Bangladesh Jute Goods Exporters Association's (BJGEA) Chairman Mohammad Shafiqul Islam said, "The country produces enough raw jute every year, but shortages are being caused by a few businessmen hoarding the fibre.
"We witnessed no shortages last year, but the supply barely covered the demand. There will be a shortage if someone hoards jute again."
He continued, "Most of the jute items Bangladesh exports are commercial items – especially jute yarns and bags. These have a larger demand in the domestic market too. Aside from such major products, Bangladesh is also exporting jute by-products.
"Such diversified and value-added goods are contributing to the booming export sector."
According to industry insiders, jute farmers did not get fair prices for their crop in the last few years, which in turn made many of them disinterested in farming the golden fibre. Another contributing factor in this decline is natural disasters and inclement weather.
Rise in exports
Bangladesh currently exports 282 jute and jute-based goods to around 135 countries around the globe. The export of such goods increased by 31% in FY2020-21 compared year-on-year. However, the figure fell 0.47% short of the annual target.
The exports reached $116.14 crore in FY2020-21, which is nearly Tk10,000crore in local currency. Export earnings from this sector exceeded $1 billion for the first time since 2018, data from the Export Promotion Bureau (EPB) shows.
It further adds that Bangladesh's exports of jute and jute-based goods have crossed $1 billion four times in the last 12 years. Earnings reached $111.49 crore for the first time in FY2010-11, then $103.06 crore in FY2012-13, $102.55 crore FY2017-18 and $116.14 crore in FY2020-21.
In FY20-21, Bangladesh's raw jute exports reached $13.18 crore, which is 6% more compared year-on-year.
The exports of jute yarn and twine also increased compared to the last fiscal year and the annual target. Exports revenue from such goods reached $79.90 crore against the target of $75 crore – showing a 42% increase when compared year-on-year, and 6.54% increase compared to the annual target.
During the same period, exports of jute sacks and bags rose by 30%, other products by 5% and man-made filaments and staple fibres by 10%.
Jute exports are showing the light of hope when other sectors have post downtrend in export earnings. Photo Mumit M/TBS
Declining trend of jute cultivation
Jute cultivation began in the region nearly 3,000 years ago. Following independence from Pakistan, Bangladesh turned jute into its primary cash crop. Though jute and jute-based goods are one of the major exports of Bangladesh, a shortage of raw jute might be looming on the horizon.
Speaking to The Business Standard, a number of jute mill owners spoke in favour of halting raw jute exports, smuggling and interference of middlemen to prevent any possible shortage of the goods.
The trend of jute cultivation has been declining in the last few years, and many farmers remain disinterested in the crop despite the prices going up in recent times. They blamed the volatile prices of jute, floods, hailstorms, cyclones and lack of adequate water for jute processing for their gradual lack of interest in the crop.
Data from the Department of Agricultural Extension (DAE) shows that Bangladesh had set an annual target of producing 82.83 lakh tonnes of jute in FY2020-21, but the amount of crop cultivated was 74 lakh tonnes.
Bangladesh grew 85.76 lakh tonnes of jute in FY2018-19 and 80 lakh tonnes in FY2019-20. Department officials are optimistic that the jute cultivation will reach 86 lakh tonnes in FY2021-22 if the weather permits.
On the issue, Monami Jute Mills' Executive Director Syed Ali AlfeSanyAkash said, "The sector will once again suffer a shortage of 5-10 lakh bales of jute this year, if the government does not make an effort to halt exports of raw jute abroad and smuggling of this crop by black marketers.
"Besides, if the 17 state-owned jute mills across the country resume their operations under the PPP (Public Private Partnership) initiative, Bangladesh demand for jute will grow further. To this end, we have urged the government to halt the export of raw jute till December this year, in a bid to ensure that local jute mills get adequate supply."
On the issue, CEO of a manufacturer of jute goods named Tulika, EsratJahan said, "Because of the raw jute exports, illegal syndicates and middlemen, we had to buy jute fabrics for three times the cost of their usual price.
"Our export volumes went down because the prices of our products went up. Though our export earnings have increased, profits have taken a hit."
According to the Bangladesh Jute Research Institute, the country used to cultivate jute in 12 lakh hectares of land in the 90s. The government had set an annual target of cultivating the crop in 7.26 lakh hectares of land in FY20-21, but jute was farmed in 6.82 lakh hectares of land.
Most of the crop is cultivated in Faridpur, Jashore, Sirajganj, Bogura, Tangail, Jamalpur and Dhaka districts.
Responding to a query, Jute farmer Abdus Salam Ahmed of Faridpur told The Business Standard, "I had grown jute in around 25 acres of land in 2010, but I did not get fair prices. So I decreased the amount of jute cultivation. This year, I sowed jute on only 10 acres of land."
Another farmer named Assad Molla said, "We have been facing a shortage of adequate water needed for processing raw jute, and the crisis continued to increase over the years. During droughts, water levels in the rivers go down and other water bodies dry up.
"Over the last ten years, I have cut in half the designated amount of land I cultivate jute in."
Meanwhile, DAE's Additional Deputy Director (Control Room) Khandakar M RashedIftekher said, "Bangladesh cultivated jute in 7.45 lakh hectors of land this year, and this is enough to meet the country's demand.
"We have received no complaints from the jute farmers in this regard. We are optimistic that this year's crops will exceed the volume achieved in the previous year, and we will face no shortage of jute."
Vehicles carry raw jute to and from a market in Jashore. Amid lower production and increased demand, farmers are happy that they are getting higher prices of their produce, once termed the golden fibre of Bangladesh. The photo was taken recently. Photo: TBS
Around 90% seeds imported from India
Bangladesh covers 85%-90% of its annual demand for jute seeds through imports from India. As soon as the jute season hits Bangladesh, farmers become concerned over the quality and timely arrival of jute seeds from the neighbouring country, DAE officials have said.
On the issue, DAE's Deputy Director DrSurojitSaha Roy said, "Bangladesh will become self-reliant in jute seeds within the next five years. The country imports around 4,500 tonnes of seeds from India every year.
"Bangladesh has set a target of producing 4,500 tonnes of jute seeds in the five years from 2025 to 2026. After we achieve this target, there will be no more seed shortages and no more dependency on imports."
The jute sector at a glance
According to the Bangladesh Jute Spinners Association (BJSA), the country has 291 jute mills, and 54 of them are currently closed. These active mills produce around 78 lakh bales of jute annually. Bangladesh has domestic demand of about 65 lakh bales of jute, while 14 lakh bales are exported.
Among these mills, 94 are under the Bangladesh Jute Spinners Association and 12 of them are closed. The Bangladesh Jute Mills Association (BJMA) has 165 mills, and 42 of them are closed. Besides, the Bangladesh Jute Mills Corporation (BJMC) has 32 such mills and all of them are currently shut.
These jute mills employ around 2 lakh people.
File Photo: UNB
Industry insiders told The Business Standard that the private jute millers are doing relatively good business.
On the other hand, state-owned mills got shut down in July last year due to their continued losses, and the government is leasing them to the private sector in hopes of making them profitable again.
The authorities have already called for tender, and entrepreneurs both local and foreign have applied for leasing the state-owned mills. A committee formed by the government will finalise the list of selected entrepreneurs after scrutiny.
On 26 March 1972, the BJMC was formed by order of the then president. The corporation was tasked with managing 78 jute mills – some of them were abandoned, while the rest belonged to the former East Pakistan Industrial Development Corporation and private sector individuals.
The number of mills increased to 82 in 1981.
After 1982, the government privatised 35 jute mills, shut down eight and merged one. Under the World Bank's jute sector reform project, Bangladesh shut down, sold and merged 11 mills after 1993.
Bangladesh shut down the Adamjee Jute Mills in 2002. Of the 32 jute mills under the BJMC, 25 remained active after their shut down last year.