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| Jute mill workers plan strike |
| Kunal Bose / Kolkata Nov 07, 2009, 00:55 IST |
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Just like last year and the year before, jute mill workers may go on strike from this month-end, too. However, observers warn this could be risky for the industry’s future markets, given the present timing.
The heavily labour-intensive industry, which provides sustenance to nearly four million growers, experienced an 18-day strike last year and its second-longest ‘cease work’ for 63 days in 2007. There are unconfirmed reports that some mill owners — unnerved by rising prices of raw jute as the season (July to June) progresses and due to the growers’ resolve to sit on a good portion of the harvest — will welcome a strike at this stage to see a weakening of the fibre market.
The benchmark TD-5 variety is now commanding a premium of over Rs 700 a quintal over the same time last year.
Never in the past, one is told, have growers spaced crop disposal to the extent they are doing this season. According to a trade official, the best prices for raw jute are received March onwards. “Richer by this knowledge and also due to the improvement in holding capacity, many farmers are finding it wise to retain a good amount of jute,” he says.
The Indian Jute Mills Association (IJMA) estimates a crop of 10.5 million bales of 180 kg each for the current season against 8.2 million bales in 2008-09. To the new season crop is to be added another 1.4 million bales on account of opening stocks and imports, mainly from Bangladesh.
The strike, if it materialises, will be happening at an inopportune time. Sugar mills, required by law to pack their entire output in jute bags, will find it difficult to get the packing material. Similarly, the strike will disrupt the government’s procurement of sacking for the rabi season.
The legal compulsion to use only jute packing has long been removed for fertilisers and cement. A former IJMA chairman says: “The Damocles’ sword is hanging on the jute industry. If we fail to make delivery of bags, we should be ready for substantial dilution of the mandatory jute packaging order next year.”
In fact, fearful of supply disruptions, the textile ministry recommended to the Union Cabinet a 20 per cent dilution in the compulsory jute packaging order for sugar and foodgrains. But, because of spirited intervention by Pranab Mukherjee and Mamata Banerjee, the dilution did not happen.
A jute strike will give a lever to the mighty plastic lobby to seek an entry in the sugar and foodgrains packing segment.
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