The move was prompted after a concerned industry shot off letters to the Jute Commissioner's Office (JCO) asking the government to arrest the prices in an overheated market. Some industry observers said the rates might have gone up on some external development which has no bearing on the market conditions.

According to the latest figures available, the TD 4 grade that was ruling at Rs 1,295.83 in February, jumped to Rs 1,507.17 in April. Industry estimates reveal that the average price of raw jute in the TD 4 grade has ruled between Rs 1,195.07 a quintal in the 2000-01 jute season and Rs 1,430.06 a quintal in the 2006-07 jute season.

The fibre hit the highest in 2005-06 when the TD 4 grade was quoting around Rs 1,625.56 a quintal. During that period also, JCO was forced to intervene in the market as prices were fluctuating between Rs 1577.30 and Rs 1676 a quintal.

The current raw jute position till March 2008 fixes an opening stock of 10.77 lakh bales, with deliveries of around 7.06 lakh bales and consumption of 7.84 lakh bales.

The closing stock till March 31, 2008, was 9.99 lakh bales with undelivered balance standing at 2.94 lakh bales and stocks and undelivered being at 12.93 lakh bales. Only 6.78 lakh bales was purchased during the period.

Industry estimates suggest that after June 2008, there would be a carryover stock of around 24 lakh bales (180 kg each). And with imported fibres costing lesser, there is apprehension that imports from Bangladesh might jump in the range of 91-115 per cent on renewed demands. The estimated crop size in 2007-08 is around 97 lakh bales.

According to the stock available with the government's raw jute procurement agency, Jute Corporation of India (JCI), it reported a negative estimate for 2005-06, 1 lakh bales for 2006-07 and 3 lakh bales for 2007-08.

Stocks available in the mill godown are 9 lakh bales for 2005-06, 5 lakh bales for 2006-07 and 9 lakh bales for 2007-08 The jute held upcountry and in transit are 5, 2 and 11 lakh bales respectively.