Workers carry bundles of jute sacks at a factory in Bogra. Thailand and Vietnam have emerged as new markets for jute sacks. Photo: STAR
A recently-created demand for jute sacks in Thailand has come as a boon for the jute industry in Bangladesh, raising hopes for a recovery in exports that fell 13 percent during July-February of the current fiscal year.
Also, India has recently increased import of jute and jute goods after its currency started to gain against the US dollar.
Prices have also increased.
“Exports of jute goods to our traditional middle-eastern and African markets have fallen amid political unrest in Libya, Syria, Iraq and other countries,” said Md Shamsul Haque, director (marketing) of state-owned Bangladesh Jute Mills Corporation that has 21 jute mills running.
“But our exports increased in the last three months as we got some new markets,” said Haque, “Thailand has emerged as a new market for our jute sacks along with Vietnam.”
The market in Thailand has widened after the current Thai-government started buying a huge quantity of rice in jute sacks to fulfil its pledge of providing a guaranteed price to farmers.
“We have received orders for supplying two crore (20 million) pieces of jute sacks from millers in Thailand,” he said.
“Thailand has opened up a new opportunity for us. It has come as a blessing as our stocks were piling up due to a fall in exports. Now all our mills are booked for the next four months,” said the BJMC official.
Private jute mills will also be benefited due to the decision of Thailand, which is the largest exporter of rice and forecasts to produce 30 million tonnes of rice in 2011-12.
“Demand for jute sacks is high in Thailand,” said Mahmudul Huq, deputy managing director of Janata Jute Mills Ltd, a leading jute yarn and jute goods exporter.
He said, as his mill alone could not meet the orders, he tied up with two other mills.
Janata ships 3.2 lakh pieces of jute sacks a month to Thailand, he said.
Huq said Thailand needs three million pieces of bags a month to package rice. It means around 36 million pieces of sacks will be required a year, he added.
“Because of Thailand, the demand for jute sacks will continue across the year. India is our main market, but its demand remains only for eight months,” said Huq.
Apart from Thailand, exporters faced an increased demand for raw jute and jute goods from India.
The Indian rupee has gained against the greenback in recent months, and so the Indian importers started to buy more jute and jute goods, said Haque of BJMC.
Mahfuzul Haque, chairman of Bangladesh Jute Association, a body of raw jute traders and exporters, also said the demand for jute goods has improved abroad.
“Prices have also gone up,” he said, “It's mainly because of increased demand from India.”
Exporters said the increased demand and higher prices of jute goods will allow them to narrow down the losses in export receipts in the first half of the year.
But it may not be possible to offset the past fall and post a positive growth in exports by the end of the fiscal year on June 30, according to Janata Jute Mill official Huq.
Export receipts from the jute industry -- the second biggest export earner -- fell 13.66 percent to $615 million in the July-February period of the current fiscal year, from $712 million during the same period last year, according to Export Promotion Bureau.