The jute industry is reeling under Rs 28 billion loss as production of jute goods has stagnated, an industry paper said.
The document prepared for the government indicated that jute goods production has stayed range bound at 1.2-1.3 million tonnes (mt) since 2014-15, down from the previous levels of 1.5-1.6 mt. Conservative estimates have pegged the loss to the industry at Rs 28 billion as production hit a plateau.
Indian Jute Mills Association (IJMA), the industry lobby body which has prepared the document, has rued that a host of factors have crippled production growth and sucked out nearly 0.4 million tonnes of output.
Raw jute production has slid and exports of finished goods have also plummeted in value and quantitative terms. Farmers in raw jute are shifting to the more remunerative crops like maize and oilseeds.
"In the backdrop of stagnating production and dwindling exports, the Union government is likely to recommend 90 percent use of jute bags for packing food grains in 2018-19 and 80 percent use of plastic bags for packing sugar. It is despite the jute industry possessing the capacity to cater to the entire government requirement of packing food grains under the jute packaging mandatory act of 1987", said an industry source.
However the Jute Commissioner's Office had previously recommended a gradual phasing out of the Act so that the industry gets the scope to develop other alternate markets along with the gradual reduction in government demand for supply of jute bags.
It had also recommended lowering the use of jute bags for packing food grains from the present 90 per cent to 50 percent by 2024.
According to the Union textiles ministry, in 2018-19, the total requirement of jute bags in the Kharif and Rabi seasons would be around 916,000 tonnes. The industry has a capacity to supply 1.58 million tonnes.