India News | Mixed Year for Jute, Govt Provided Relief for Industry to Bounce Back
Get latest articles and stories on India at LatestLY. The jute sector experienced a mixed bag in 2023. There was a bumper harvest of the cash crop, but a mid-season demand slump caused concern until government intervention revived hopes.
Kolkata, Dec 31 (PTI) The jute sector experienced a mixed bag in 2023. There was a bumper harvest of the cash crop, but a mid-season demand slump caused concern until government intervention revived hopes.
Although capacity utilisation temporarily dropped, there is optimism for the remaining jute year (July 1, 2023, to June 30, 2024) due to sustained orders and supportive policies by the Centre.
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"It was a mixed year, but the outlook remains steady," said Raghav Gupta, chairman of the Indian Jute Mills Association (IJMA).
"There was a strong initial supply, followed by sluggish demand between September and November. This caused a 20-25 per cent capacity decline in mills and low demand for raw jute. However, a government push from mid-December fueled a welcome revival in order flow," he said.
"Central support was crucial," said jute expert and former IJMA chairman Sanjay Kajaria.
"Close monitoring and order facilitation significantly improved the situation," Gupta said, hoping capacity utilisation to recover in the new year with fresh jute packaging orders from state and central agencies.
Government initiatives provided much-needed relief. Mandatory packaging norms for Jute Year 2023-24 stipulate 100 per cent foodgrain and 20 per cent sugar packaging in jute bags, boosting sector confidence. Additionally, the Minimum Support Price (MSP) for raw jute was raised by Rs 300 per quintal, benefiting both mills and farmers - an estimated 4 lakh workers and 40 lakh farm families in the country.
Due to a bumper harvest, raw jute prices dipped below MSP. However, the Jute Corporation of India (JCI) stepped up its procurement efforts, achieving a 100 per cent increase over 2022, with 8.43 lakh quintals procured by October 29, valued at Rs 393 crore.
"We have 110 Departmental Purchase Centres and 25 Outsourced Agencies actively engaged in MSP operations. We also hired 70 additional storage spaces across West Bengal, Assam, Bihar, Odisha, Andhra Pradesh, and Tripura to ensure smooth procurement," said JCI GM K Mazumdar.
Further protecting farmers, the jute commissioner mandated a minimum purchase price at MSP level until January, by which time market recovery is expected due to renewed mill demand. The government itself remains a significant consumer, purchasing around Rs 9,000 crore worth of jute bags for foodgrain packaging.
While challenges remain, the jute sector seems poised for a comeback in the remaining half of the jute year. This is bolstered by government support and a strengthened outlook spurred by renewed demand, stakeholders said.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)