Hessian drags down jute exports

Share of yarn and jute diversified product in the total jute export of India has been quite consistent but there has been a sharp decline in hessian in the year 2003-04 as compared to the preceding year.

There has been a 8 per cent marginal decline in the total export of jute to Rs 839.67 crore in 2003-04 from Rs 916.75 crore in the previous financial year, according to estimated provisional data provided by the Jute Manufacturers Development Council (JMDC).

The fall was primarily due to significant decline in export of hessian to Rs 182.83 crore in 2003-04 from around Rs 272 crore in 2002-03.

The share of its export to the total export value declined to around 20 per cent from nearly 30 per cent year on year.

The export of sacking and yarn registered a significant improvement with a consistent show by the jute diversified products (JDP).

The poor performance of hessian in exports was a area of serious concern as hessian was the second largest contributor accounting to nearly 26 per cent of the total volume of jute export. Yarn came second.

"Indian exporters are facing tough competition from Bangladesh in terms of price. There are several types of hidden subsidies that are providing them with a comparative advantage", N Sengupta, chief finance officer (CFO) of JMDC, told Business Standard.

The decline in the export in value terms was not very significant as the final figures are yet to come from the Directorate General of Commercial Intelligence & Statistics (DGCI & S), added Sengupta.

The major area of concern was the decline in demand for Indian goods owing to the substantially lower prices of Bangladeshi goods.

"Due to price advantage enjoyed by Bangladesh Indian exporters suffered from a decline in demand. Presently, Indian exporters were supplying only the residual demand of the global market resulting from Bangladesh supply", said Sengupta.

The performance of yarn was satisfactory. Its share of export in value terms reached around 30 per cent of total export in 2003-04 from the previous year's 27 per cent.

The major purchasers of Indian jute yarn were Egypt, Turkey, Belgium and Latin American and African countries.

Japan, United Kingdom, Germany, Italy, France, Syria, United States of America were among the top twenty importers of Indian jute and jute products, according to JMDC.