New crop fails to ease raw jute prices

The recent arrival of new crop has failed to ease prices of raw jute in the domestic market with the prices ruling at Rs 30,000 a tonne. The possibility of a further increase in prices has raised serious concerns in the jute industry.

According to data compiled by the Jute Balers’ Association, the price of raw jute on July 20 this year stood at Rs 30,100 a tonne compared to the average price of Rs 27,670 a tonne in June this year. The prevailing price of raw jute in this month has more than doubled as against the average price of Rs 14,880 a tonne in July last year.

The price of B Twill jute bags was ruling at Rs 41,500 a tonne (as on July 20 this year) which is 45.3 per cent higher than the average price of these bags for the month of July last year.

The raw jute price touched alarming levels at a time when raw jute is more or less unavailable, trading volumes are minimal and the jute mills across the country are starved of the fibre crop.

Industry sources said there is hardly any price difference between the old and new crop which indicates massive speculation. Moreover, there is a fear of the new crop getting impacted by speculative and shady jute operators indulging in fatka or dhabba trade.

Apart from speculative trading, there is illegal hoarding of the new crop by speculators with the intention of rigging prices and maximising the profit at the cost of the jute industry. The jute industry is the victim of the market forces where bulls and bears are operating through futures trading in raw jute, added sources. The jute industry has been making abortive attempts to put an end to futures trading in jute for the past one year.

According to the estimates of the jute industry, the annualized price volatility for raw jute could be over 53 per cent as against the normal 12.6 per cent worked out by National Commodities and Derivatives Exchange (NCDEX).

Concerned over the problems of the jute industry in the wake of spiralling prices of raw jute fuelled by speculative trading, the Indian Jute Mills Association (IJMA) has sought the intervention of the Jute Commissioner. IJMA has written to Binod Kispotta, the Jute Commissioner for redressal of the grievances of the jute industry and restore normal condition in the raw jute market to ensure smooth industrial operations of the jute mills.