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| Raw jute prices fall 40% on fear of change in packaging order |
| Jayajit Dash / Bhubaneswar Aug 18, 2009, 00:55 IST |
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Raw jute prices in the domestic market, which touched an all-time high of Rs 30,200 a tonne in July this year, have crashed 40 per cent to reach around Rs 18,000 a tonne this month.
The steep fall in raw jute prices has been noticed amidst concerns of a possible 25 per cent dilution in Jute Packaging Materials Act (JPMA) of 1987. JPMA provided 100 per cent reservation for jute bags in packaging of food grains and sugar procured by the government.
The 25 per cent dilution in JPMA was recommended by the Centre’s Standing Advisory Committee chaired by the Union textiles secretary. The matter was expected to be taken up for discussion by the Cabinet Committee on Economic Affairs (CCEA). The sharp fall in raw jute prices has also been attributed to the sugar industry’s move to refrain from procuring jute bags, on the feedback that the Union textiles ministry is bent on 25 per cent dilution.
The sugar industry has stayed away from buying jute bags despite the arrival of the new jute crop from July 1 this year, thereby leading to an unprecedented situation.
Industry sources have alleged that the sugar industry has resorted to clandestine buying of plastic bags which has hit the jute industry.
It may be noted that the sugar industry had procured 7,637 tonnes, 10,751 tonnes and 11,482 tonnes of jute bags in the months of July, August and September, respectively, in 2008.
The Indian Jute Mills Association (IJMA), the representative body of the jute industry in the country, has sought the intervention of the Union textiles ministry to come to the rescue of the jute industry.
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