Jute has high demand abroad, but lacklustre approach slows down growth in production & trade
Bangladesh earned US$1.01 billion from exports of jute and jute products in the financial year (FY) 2012-13 that ended on 30 June. This is only the second time in history that the raw jute and jute products fetched export earnings for the country beyond a billion-dollar-mark. The first time jute export earning hit the billion-dollar-mark was in FY 2010-11.
The Export Promotion Bureau (EPB) data show earnings from the sector were US$67.38 million in FY 2011-12, US$1.11 billion in FY 2010-11, US$787.99 million in FY 2009-10 and US$417.42 million in FY 2008-09.
Now is the best time to take pro-active actions, if Bangladesh really wants to carry this momentum forward in jute sector, and take the steady export growth to a new height. There are several factors why people in the sector consider the time is ripe now to act on the target of promoting the cause of jute, once called the Golden Fibre of Bangladesh.
Because of green movements around the world, citizens all around are getting more and more environment-conscious, and demands are on rise for the use of natural fibre worldwide. Many countries, one after another, are curbing usage of and slapping bans on non-biodegradable products like plastic bags, polyethylene and polypropylene.
Denmark had in 2003 introduced a tax for retails for giving out plastic bags. This step encouraged stores to charge for plastic bags and pushed the use of reusable bags. It is estimated that this saved about 60% of plastic and paper bags. All stores in Germany that provide plastic bags must pay a recycling tax. Introduction of levy forced 90% of Ireland consumers to use long-life bags. In 2011 Italy banned the distribution of plastic bags that are not from biodegradable sources.
In Canada, Toronto city banned use of plastic bags this year. In the United States, too, there are many big and small cities that have slapped partial and complete ban on plastic bags with the exception of biodegradable bags. At the same time it is true that there are cities where usage of plastic bags remain abound due to strong plastic industry lobbies.
Both Bangladesh and India, the world’s two top jute producers, banned plastic bags below certain degree of thickness in 2002. However, enforcement remains a serious problem.
Bangladesh Jute Spinners Association Chairman Md Shams-uz-Zoha said ‘the export earnings grew from the sector because of high demand for natural fibre-made products following a ban on plastic products, especially plastic bags in some countries.’
The aforesaid examples of countries and cities banning plastic bag usage are testimonies of what Zoha has said.
With its 187 jute mills (over two dozens are closed now) that employ 0.15 million workers, Bangladesh’s average internal consumption of jute goods is over 0.10 million tonnes while its jute goods export volume is over 0.50 million tonnes.
Since 2010 there has been a legal move to enforce mandatory use of jute in packaging industry in the country. After enactment of the law in 2010, the government again made some amendments to the law in July this year to enforce mandatory use of jute in packaging. But its enforcement still remains a far cry.
According to an estimate, the full enforcement of the packing law will create demand for 8.4 billion jute bags a year for packaging of selected agricultural and non-agricultural products in the country. If so is the case, the production of these bags would require 70 percent of local raw jute.
Currently, Bangladesh exports around 2.3 million bales of raw jute a year, while it produces seven million bales of jute. Local factories use four million bales to make yarn and jute goods, more than 80 percent of which are exported.
So, urgent steps are required to push up domestic jute productions, increase jute mills’ production efficiency, ensuring just prices to jute growers, quality enhancement and tapping foreign markets – if Bangladesh has to cater better in future both to the domestic and international markets.
Just gradual substitution of plastic bags with gunny bags in local and many other foreign markets would create a big demand for jute that Bangladesh needs to prepare itself for rising up to that occasion from now.
Industry people say the jute bag export has already increased as some new jute bag-manufacturing units were set up in the country in private sector. The factories went into operation in the last couple of years and entered into export market.
The government’s policy supports in terms of providing farmers with better jute seeds, investing more on jute research and development, ensuring price supports to jute growers, tapping new markets and professional running of the state-run jute mills can make a good difference.
Actions are also needed to translate the scientific achievements in jute sector into enhanced productivity. In recent years Bangladeshi scientists succeeded in decoding both the jute genome and the genome of a fungus – macrophomina phaseolina – that causes havoc to global jute production.
Macrophomina phaseolina fungus causes an annual yield loss of around Tk 4,000 crore, damaging 30 percent of the country’s precious natural fibre.
It is expected that gene sequencing of jute and the fungus would give inroads for developing jute varieties capable of fighting the damaging fungus and thereby giving enhanced jute productions. Besides, improved quality fibre is also expected as results of these advancements in jute research.
To rejuvenate the jute sector further, the government needs to invest more on jute research, and conscious policy initiative is also required so that the best minds in jute science are not brain-drained. The government needs to provide the jute researchers proper supports, incentives and environments conducive to research.