Scarcity of raw jute forces four mills in West Bengal to halt ops, more may follow

IJMA director Debashish Roy said while some jute mills have more stock of high quality raw jute and less stock of low quality raw jute some have just the reverse. The imbalance in stock is either disenabling the millers to produce sacks or to produce hessian fabric. (File image)

Four jute mills namely Delta, Hanuman, Wellington and Budge Budge in the state have stopped operations for shortage of raw jute while 25 more are at the brink of closure.

Despite fresh government orders and the industry’s commitment to supply 7.3 lakh bales equivalent of B Twill or jute sacks between April and June this year to the state food procurement agencies and the Food Corporation of India, millers fear that the industry will fail in keeping its commitment.

The shortage of raw jute is to the extend of 5-7 lakh bales but the crisis has been aggravated with the Jute Commissioner’s (JC) office mismanaging supplies and failing to control prices. Raw jute prices are at the level of Rs 8,000 per quintal at present. Further, the JC’s recent raw jute stock holding order for 72 jute mills have left the jute millers in a quandary since the specified stock limit for each of the 72 jute mills doesn’t exceed more than a month’s stock, according to the Indian Jute Mills Association( IJMA).

IJMA director Debashish Roy said while some jute mills have more stock of high quality raw jute and less stock of low quality raw jute some have just the reverse. The imbalance in stock is either disenabling the millers to produce sacks or to produce hessian fabric.

The IJMA has already urged the jute commissioner to withdraw the latest order restricting raw jute stock or ” the jute industry will heavily fail in its commitment for supply of B Twill bags, thereby defeating the very purpose of reservation of packaging food grains in jute bags as mandated under the JPM Act 1987,” Roy stated in a written communication to JC.

The letter also states that the earlier order in January this year, “has failed to elicit desired effect due to actual shortage of raw jute during the crop year 2020-21”. The JC’s January order while specifying stock limit for each and every jute mill of the country’s 72 jute mills, also asked the jute mills to file weekly stock returns instead of monthly stock returns to prevent brisk buying. This order was kept valid up to July but a section of millers and balers moved the Calcutta high court challenging the order.

The IJMA said the JC’s January order is “subjudice and has been adjourned till April 28”. But the JC has issued fresh orders on April 9. When the JC issued orders in January this year, average raw jute prices were hovering at around Rs 6,100-6,200 a quintal but now prices are above Rs 8,000 a quintal, which means the JC’s measures were ineffective, an IJMA member said.

Deputy jute commissioner Koushik Chakraborty told FE that the orders specifying the amount that every jute mill should hold, actually intends to equitably distribute raw jute among millers when availability is really scarce.

“The IJMA has actually voiced for a handful of cash rich jute mills that wants to hoard. It is not the voice of all jute millers. So there is no way, we step back from our decision,” Chakraborty said, adding we have considered parameters such as production level, raw jute stock, raw jute utilisation and others of each and every jute mill before deciding on the latest stock limit.

During November last year the industry alleged of 24 lakhs bales of unauthorised hoarding and the JC swung to into action to search and seize. However, it stopped its anti hoarding drive from February end anticipating social unrest for the ensuing poll.