Raw jute price up 18% in AP

Raw jute (mesta) prices in Andhra Pradesh have increased by Rs 4,000 per tonne, or 18 per cent, in the last five months. Mills in the state mostly depend on West Bengal for meeting their requirements.

“In July, when raw jute arrivals start, the price ruled at Rs 22,000 per tonne. But now, West Bengal is supplying at Rs 26,000-Rs 27,000 per tonne and it is likely to go up to Rs 28,000,” BV Rama Rao, managing director, Swarnandhra Jute Mill, told Business Standard.

Till last year, local mills bought from Bangladesh too. However, this year, the Bangladesh government has banned jute exports, which is one of the reasons for the increase in prices, he added.

Mills in Andhra Pradesh require about 350,000 tonnes of raw jute annually, of which the state produces only 20-25 per cent. The remaining is met by West Bengal.

Consequently, finished product prices too have shot up by Rs 3,000 per tonne during the same period. For instance, twine prices, which stood at Rs 36,000-37,000 per tonne in June, is now at Rs 39,000-40,000 per tonne while gunny bags have increased to Rs 65,000 per tonne from Rs 61,000-Rs 62,000, he said.

The minimum support price for raw jute is Rs 13,750 per tonne. However, as middlemen in West Bengal offer Rs 22,000 per tonne to farmers, the Jute Corporation of India is unable to procure from farmers.

Moreover, the jute industry in the state is faced with severe labour shortage. “During last season, we paid Rs 110-120 per day to a worker in twine mills, but now they are demanding Rs 150 per day. Most of the twine mills, therefore, are operating only two shifts a day instead of three,” he said.

Andhra Pradesh has nine composite mills producing gunny bags and 19 twine mills of which more than 80 per cent are located in the north coastal region.