Centre decides to lift price capping on raw jute with effect from Friday

It is expected that the cap removal Rs 6,500 per quintal will help the farmers, mills and jute MSME sector

Around six months after the price of raw jute was capped at Rs 6500 per quintal, which allegedly led to a crisis in the industry, the government on Thursday decided to withdraw it from May 20, according to a notification.

The move followed pressure from various quarters including Arjun Singh who is a BJP MP of West Bengal where the majority of the jute mills of the country are located.

"After careful analysis and considering the current market scenario of raw jute availability, the September 30 notification stands withdrawn from May 20,” the Jute Commissioner's Office (JCO), a central government agency that looks after orderly development and promotion of the industry, said in the notification.

The Indian Jute Mills Association (IJMA), which had claimed that millers were not getting raw jute below Rs 7,000 a quintal leading to the crisis, and Arjun Singh welcomed the step.

About a dozen-odd jute mills had to shut operations due to raw jute availability at the government price, rendering job loss for thousands of workers.

The price cap removal is expected to help farmers, mills and the jute MSME sector. There are around 2.5 lakh jute mill workers and 40 lakh jute farmers.

In the past one week, raw jute prices have corrected to Rs 6700 per quintal, down from Rs 7200 a quintal, over bumper crop projection.

"It is a very welcome step. Any regulation in commodities is unwarranted," IJMA Chairman Raghavendra Gupta told PTI.

Thanking Prime Minister Narendra Modi and Union Textiles Minister Piyush Goyal for the move, Singh tweeted that it is a “big victory” for lakhs farmers and workers and the jute industry.

A tripartite meeting involving representatives of the Centre, West Bengal government and jute mills was held earlier this month in New Delhi to discuss the contentious issue of the price cap on raw jute.

The Ministry of Textiles convened the meeting after the BJP MP accused it of neglecting West Bengal's jute industry and claimed that its policy towards the golden fibre is flawed. Singh had also written to Chief Minister Mamata Banerjee, urging her to intervene in the raw jute price cap issue.

The West Bengal government too had demanded that the Centre remove the price cap to save the industry.

The Calcutta High Court on May 11 directed the JCO to take steps so that mills can get raw jute at the notified rate of Rs 6,500 per quintal but review the price if it cannot be adhered to.

Trinamool Congress Chief Whip in the Rajya Sabha, Sukhendu Sekhar Ray, had also sought the intervention of the Centre to resolve the jute crisis claiming that 60,000 workers have lost their jobs following closure of several mills.

The JCO, however, had said last month that the price cap was finalised after looking into all aspects, including the farmers' interests.