Once-thriving jute industry is seeing a sharp downturn in exports of jute and jute goods as the country is gradually losing its competitive edge in the global market.
Even though the government set a target to export jute and jute products worth approximately $93 crore during the period from July to May in the current fiscal year, exports fetched only $79 crore, according to the data available from the Export Promotion Bureau.
The data also showed that Bangladesh exported jute and jute products worth about $85 crore during the same period in the previous fiscal year.
However, farmers are likely to reduce jute cultivation across the country while businessmen are reluctant to make new investment due to various reasons, including high interest on loans.
President of Bangladesh Jute Association (BJA) Farhad Ahmed Akand told Bangladesh Post, “When the price of seeds and fertilisers has increased, the government has cut subsidy. This has put negative impact on jute growers. If jute cultivation drops, it will be difficult to get local jute seeds in the coming days.”
As jute price is declining in our local market, farmers are also getting frustrated, he added.
Several factors contribute to the decline with inadequate financial support being a key issue. Jute traders have to pay 11-12 percent interest on loans, compared to 3 percent interest rate provided to the ready-made garment sector.
The loans come with additional quarterly charges, further burdening jute businesses. Moreover, the sector suffers due to outdated machinery, making it difficult for them to compete with technologically advanced countries.
Secretary of Bangladesh Jute Mills Association Abdul Barik Khan said, “We do not get bank loans at all. The government is providing loans to the garment sector on easy terms at 3 percent interest. And we have to take loans at 11-12 percent interest which has now been extended again.”
Despite government announcement to recognise jute products as processed agricultural goods, traders have yet to derive these benefits. Bureaucratic tangles have left them without the promised advantages, reducing their competitive edge.
On the other hand, the extension of anti-dumping duties by India has severely impacted exports. India on December 30, 2022 extended the duties for five more years, varying by product and significantly increasing costs for Bangladeshi exporters.
Initially imposed in January 2017, these duties range from $19.30 to $351.72 per tonne, bringing down jute exports to India.
Traders have called for streamlined sea routes to facilitate exports, but issues like discrepancies in truck numbers and high transportation costs persist. These problems must be addressed for more efficient and cost-effective export methods.
Managing Director of Creation Private Limited Md. Rashedul Karim Munna told Bangladesh Post, “Global unrest have an impact on our overall production and export. Increasing allocation for research and development of jute, providing facilitates to exporters, and organising international fairs can play an import role in developing the sector.”
“As most of our country’s businessmen make traditional goods, their earnings are also limited. As a good number of jute products have now huge global demands, we can earn more by exporting jute goods if we become able to make them,” he added.
Despite these challenges, Bangladesh's jute sector continues to boom. New products like yarn blended with cotton, jute geo-textiles, specialized printing ink, and charcoal from jute sticks are gaining traction globally.
Traditional items such as saris, lungis, salwar kameez, and decorative products also contribute to foreign exchange earnings, showcasing the potential of the jute industry.
