Mill Owners See Shortage In Raw Jute Supply

Raw jute procurement by mill owners during the peak season September-November is likely to snowball into a shortage crisis following the recent order by the jute commissioner Bimal Pande asking traders to disclose jute stocks held in excess of 500 quintals as on September 30.

According to officials in the Jute Balers' Association, following the order of the jute commissioner, prices of raw jute have dropped by Rs 80 over the last week from Rs 1,080 to Rs 1,000 for TD4 grades. Officials said, with the pressure on prices of raw jute increasing, growers are now likely to hold on to the crop till they get a favourable price. About 70 per cent of the total crop is still held by the growers, the remaining 30 per cent is with traders.

"Since the farmers have suffered heavy losses in the last two seasons on account of factors like floods, price realisations have been low. Therefore this season, they are likely to hold on to their crops till they get a favourable price."

The Jute Balers' Association estimates that some stocks would be released in the market by the traders, which include old and new stocks.

However, since the bulk of the crop is still with the growers, the market would be strapped for raw jute supplies till prices firm up again. The situation has been further aggravated by the jute commissioner's order.

During 1998-99, the raw jute crop has fallen short of consumption estimates despite having a carryover from last year, officials said. The raw jute crop has been 70 lakh bales this year, out of which 10 lakh bales are estimated to be damaged. There is also a carryover of 30 lakh bales. This falls far short of the consumption estimates for the year, they added.

Meanwhile, the association has met with the state agriculture minister, Naren Dey, to intervene for revoking the jute commissioner's order. Bimal Pande has invoked his powers under the Essential Commodities Act of 1955 to order traders and jute mill owners to stop hoarding.

The order was passed on October 10. However, the order against hoarding has been welcomed by the Indian Jute Mills Association (Ijma), though officials stressed that this should only be a temporary measure.