Export earnings come down from
90pc to 3pc

The golden fiber of Bangladesh

Mahfuja Mukul: The glory of Bengal jute is quite old. And jute was the main source of income in Bangladesh economy. Which has largely faded in the last five decades since independence. The contribution of jute to export income has become negligible.
Data analysis shows that the share of jute and jute products in the total export earnings of the country in the post-independence 1972-73 fiscal year was 69.7% of the total export earnings. The total export income that year was $34.74 million. Of this, jute exports alone are more than Tk 31 crore. Raw jute exports were worth $130 million and jute products were worth $160 million.
On the other hand, in the last financial year (2020-21) the export income of jute and jute products was $116.14 crore. In these five decades, the country’s overall export income has stood at $3.85 billion, while jute income is only 2.99 percent. In other words, despite the increase in the financial value of jute exports in the last five decades, the contribution of jute to the total exports has decreased by about 6 percent. It has taken the place of clothing, medicine and other products.
Not just exports, jute industry has gone through decades of golden times in post-independence Bangladesh,since the establishment of Bangladesh Jute Mill Corporation (BJMC) in 1972 with 6 jute mills in the country, it was the largest industry in the country till the eighties. At that time BJMC was the largest industrial enterprise in the country in terms of manpower. Where about 60,000 workers and five and a half thousand officers and employees were directly employed. Besides, the industry was at the top in terms of domestic production and income.
Later in 1971, the number of mills of the company increased to 72. From then on, the matches started falling at a loss. During the Hussein Muhammad Ershad government, 35 jute mills were left to the private sector. The capital of eight jute mills was withdrawn and after 1990, 11 jute mills were closed, sold and consolidated under the World Bank’s Jute Sector Reform Program. The world’s largest Adamjee Jute Mill and ABC Mill closed in June 2002.
After that, out of 26 jute mills under BJMC, 25 were operational till 2020. Of these, 22 are jute mills and 3 are non-jute mills. Due to the continuous losses at that time, the government ordered the workers of the mills under the control of BJMC to cease their jobs under the Golden Handshake facility and the production activities were completely stopped. The story of jute comes to a complete halt.
In such a context, National Jute Day-2022 is being celebrated on Sunday (March 7) with the slogan ‘Golden country of golden fiber, environment friendly Bangladesh’. On the occasion of the day, the Ministry of Textiles and Jute is talking about the promise of production and export of jute and jute products.
The government says that despite the increasing use of synthetic fibers (polythene), the era of sustainable development has once again created a huge global demand for environmentally friendly jute and jute products. In this context, it is possible to bring back the lost days of jute in various initiatives including increase in jute exports, expansion of jute products and market expansion, increase in use of jute products in the country. To this end, the Ministry of Textiles and Jute is promising to reopen the jute mills.
Textile and Jute Minister Golam Dastagir Gazi said the process of restoring the good days of jute is being started by leasing out the jute mills under private management. Meanwhile, Bangladesh Jute Mill in Narsingdi and KFD Jute Mill in Chittagong have been leased out. The process of leasing two more jute mills is underway. Letters of interest have been invited for the second time to lease the remaining 13 jute mills. These jute mills will be started as soon as possible.
Meanwhile, farmers have lost interest in jute cultivation due to closure of jute mills. Where earlier farmers were interested in jute after paddy cultivation, now other crops have taken its place. As a result, the amount of land for jute cultivation is decreasing day by day.
In the last fiscal year 2020-21, 6 lakh tons of raw jute has been produced in the country. Jute is now cultivated in only seven and a half lakh hectares of land in the country. Where even a few years ago in the financial year 2018-19, 65 lakh 6 thousand tons of jute was produced in 6 lakh 49 thousand hectares of land.
As a result, the private jute mills of the country are not getting proper supply of jute. Jute mill owners have been suffering due to the increase in the price of raw jute in the last few years due to lower production than demand. Many entrepreneurs are unable to run factories at full production capacity due to rising prices. It is also claimed that some have stopped production for the last two years.
Abul Hossain, chairman of Bangladesh Jute Mills Association (BJMA) told Daily Industry that due to instability in jute prices, many mills are unable to produce and support their products.
As a result, about half of the factories have stopped production. Meanwhile, exports of jute and jute products have declined in the current financial year due to the high price of jute.
Meanwhile, data analysis by the Export Promotion Bureau (EPB) has shown that the country’s jute export sector has lost momentum since the beginning of the current financial year (2021-22) where the growth in exports of jute and jute products was about 32 percent in the last financial year (2020-21). In the first seven months of the financial year (July to January), exports of jute products declined by 9 percent. In those seven months, the export income from jute products was $696 million, which was $766 million in the same period of the previous financial year.
Talking to the entrepreneurs in the sector, it was learned that due to the unusual price of raw jute as well as the increase in freight charges for export, they are suffering from various problems including anti-dumping in India.
However, Bangladesh still dominates the world market in the export of jute and jute products. Bangladesh controls 69 percent of the world’s jute exports. After the government withdrew from the jute market, the private sector has kept the sector afloat.
It is learned that at present BJMA has 206 members. Of these, 60 are closed. Of the 97 member factories of Bangladesh Jute Spinners Association, 60 are operational. Two and a half lakh workers work in the factories in production. They occupy the lion’s share of jute exports. Jute products worth around Tk 195 crore are in demand in the domestic market.