New packaging rules may cost jute industry Rs 2,000 cr

The Union food ministry's push for a dilution of up to 30 per cent in mandatory packaging of wheat in jute bags is set to burden the ailing jute industry with a staggering loss of Rs 2,000 crore. The office of the jute commissioner has approved the dilution move, guided by a projected deficit in availability of jute bags for the December 2016- March 2017 rabi season. Initially, the commissioner's office had proposed a dilution of 10 per cent that may be extended up to 30 per cent after the month-on-month review of the deficit in supplies.

The projected deficit in jute packaging material is pegged at 0.14 million bales (one bale is 180 kg). Compared to the packaging requirement of 1.34 million bales for the upcoming rabi season, the availability of material is pegged at 1.2 million bales. Keeping in view the projected deficit, the commissioner's office has sought permission for use of high density polyethylene and polypropylene bags for packaging of wheat under 10 per cent window provided in the notification of Jute Packaging Materials Act, 1987. The Act provides for 100 per cent mandatory packaging of foodgrains and sugar in jute bags.

Manish Poddar, chairman, Indian Jute Mills Association declined to comment on the issue.