Jute industry in crisis over supply of 30-kg bags

The jute industry has confronted a crisis with the Punjab government raising a sudden demand for 30 kg jute bags instead of the regular 50 kg bags for packaging of wheat and other food grains.

The demand was recently placed by the Punjab government before the Union food ministry under the National Food Security Act. The Act is likely to come into effect from June this year. Punjab has proposed to procure 30 kg jute bags for packing 0.87 million tonne of wheat during the Rabi marketing season of 2014-15.

The jute industry lacks the expertise to produce 30 kg bags. Presently, the industry is capable of producing and supplying only 50 kg bags with each bag weighing 665 gms. The bags are used for packing of sugar and food grains under the provisions of Jute Packaging Materials Act (JPMA), 1987. The Act provides for a mandatory 100 per cent reservation for jute bags for sugar and food grains for government procurement agencies.

“The requirement for 30 kg bags can also be derived by using the similar line of production used for manufacturing 50 kg bags,” says a leading jute mill owner.

It is only the Bureau of Indian Standards (BIS) that can decide if the 50 kg specification (BIS 12650: 2003) can be used for 30 kg jute bags.

“We have already approached the BIS regarding specifications for manufacture of 30 kg jute bags. I believe the industry can manufacture such bags. We will immediately supply the 30 kg bags on receipt of demand,” said Raghav Gupta, chairman of Indian Jute Mills’ Association (IJMA).

Punjab is the largest purchaser of jute bags in each Rabi and Kharif seasons for packing food grains. Over a third of the one million tonne jute bags produced for government buying are purchased by Punjab through the Food Corporation of India (FCI) in the Kharif and Rabi seasons. The current government price of jute bags is around Rs 52,000 per tonne. Haryana, Chhattisgarh, Uttar Pradesh, Bihar and Andhra Pradesh are the other leading purchasers of jute bags for packing food grains and sugar.

Almost 30 per cent of the 250 million tonne of food grains produced are, packed in jute bags worth around Rs 6,000 crore. Around 40 per cent of jute bags produced is purchased by the Union food ministry through Food Corporation of India (FCI) on behalf of different state food procuring agencies. The jute sector has the capacity to manufacture around 1.2 million tonne of jute bags. The installed capacity is around 1.5 million tonne.