Centre reduces raw jute stock limit to facilitate supply to mills

In a recent notification issued by Office of Jute Commissioner, max stock limit has been brought down to 500 quintals for jute balers from 750 quintals and 50 quintals for traders from 150 quintals

The Centre has further reduced raw jute stock limit for balers and traders in a bid to increase supply of the raw material to mills at a time when major foodgrain producing states are facing a shortage for the environment-friendly packaging material, industry stakeholders said on Sunday.

In a recent notification issued by the Office of the Jute Commissioner, the maximum stock limit has been brought down to 500 quintals for jute balers from 750 quintals and 50 quintals for traders from 150 quintals, they said.

This is the second such move that the authorities have taken in the current year.

"In January, the government reduced the raw jute limit to 750 quintals from 1,500 quintals. Now, the same has been brought down to 500 quintals. It is not a viable quantity for a baling unit to run its operation smoothly," Jute Balers Association secretary A K Palit told PTI.

Balers are major suppliers of raw jute to mills.

The ongoing raw material crisis has led to "closure of nearly 15 mills and units that are still running have reduced utilisation and are making losses", a source in the industry claimed.

The Centre has put a ceiling on the stock limit with an objective to prevent hoarding of raw jute in the market and ease supply of the commodity to mills at a reasonable price, the industry stakeholders said.

The price of raw jute continues to hover around Rs 7,000-7,200 per quintal, but the government will pay Rs 6,500 per quintal as the raw material cost for gunny bag production, they claimed.

"The move to prevent hoarding could not yield much result for improving supply of the key raw material to jute mills. Millers and trade unions have been vocal against ineffective support price operation of the Jute Corporation of India," the industry source said.

Meanwhile, the Commission for Agricultural Costs and Prices (CACP) has recommended that the JCI, a state-run organisation which procures raw jute, should take proactive steps to extend its reach for spot procurement directly from villages as this will help discover competitive prices.

Recently, the ministry of textiles had anticipated a shortfall in jute bag supply and advised the authorities to consider placing orders for plastic bags.