Govt projects 37% deficit in jute bag supply this rabi season

The supply of jute bags to package food grains this rabi season would be 37 per cent lower than the requirement, according to government estimates. The shortfall is much higher than the exemption allowed by the Union Cabinet on October 11 last year.

The Cabinet Committee on Economic Affairs (CCEA) had decided that 10 per cent of the total production of food grains in the country be packaged in plastic material — high density polyethylene (HDPE) or polypropylene (PP) bags.

According to estimates, while the requirement for jute bags in the rabi season (between December 2012 and April 2013) is about 1.89 million bales, the jute industry wouldn’t be able to supply more than 1.22 million bales, a shortfall of 0.67 million bales.

The Indian Jute Mills’ Association (IJMA), however, doesn’t anticipate any deficit. “The jute industry has submitted a detailed plan to the Union textiles ministry on the supply position of jute bags. While the ministry is free to allow 10 per cent dilution in favour of plastic bags, the jute industry is fully equipped to meet the balance 90 per cent demand,” said Manish Poddar, IJMA chairman.

The projected deficit in the supply of jute bags is expected to be met through plastic (HDPE/PP) bags, which are cheap and easily available. The price of a synthetic bag is only Rs 12, compared with Rs 28 for a jute bag.

Under the Jute Packaging Materials Act (JPMA)-1987, sugar and food grains produced in the country would have to be packed in jute bags produced during the year. Earlier, the government had accused the jute industry of short capacity and supply. On November 16, 2011, the CCEA had decided to carry out a thorough review of the jute sector. The government is yet to conduct the review.

Along with the 10 per cent relaxation in the packaging of food grains, the CCEA had also de-reserved 40 per cent sugar packing in plastic bags.

Synthetic producers have moved the Competition Commission of India, accusing the jute industry of manipulation, cartelisation and rigging jute bag prices.