KOLKATA: Indian Jute Mills Association (IJMA) has sought the intervention of Prime Minister Narendra Modi in relaxing the price cap of raw jute so that it is at par with the market price.
The key contentious issue before the jute industry is the price cap of Rs 6,500 per quintal imposed on raw jute trade since September 30, 2021.
Following this the mills have claimed that they are unable to procure raw jute at any rate below Rs 7200 per quintal, the IJMA said.
"Certain policy decisions have made this Industry, which employs over 2.5 lakh workmen and supports 40 lakh farm families, totally unviable to operate," IJMA chairman Raghavendra Gupta said in a letter to the Prime Minister on Monday.
More than three months have elapsed since the price cap of Rs 6500 per quintal was imposed and raw jute has not been made available at that price even for a single day.
"The ruling market price is Rs. 7,2OO per quintal in line with the international price of raw jute being exported out of Bangladesh," he said in the letter.
More than 40 per cent of raw jute crop is still at the micro-level and farmers are reluctant to let go of their produce at the price fixed by the Jute Commissioner.
"There is every possibility that the jute sector in Bangladesh will gain at the cost of the Indian jute industry if such a policy continues any longer," Gupta said in his letter.
He said jute mills in India are hugely dependent on the mandated sector of supplying jute bags for food grain packaging to FCI and state food procuring agencies.
The pricing of these bags are done on the basis of the reasonable price of raw jute fixed by the Jute Commisioner at Rs 6500. At the same time mills have to purchase jute at market price of Rs 7,2OO.
"This is making the entire sector financially sick and many mills have closed down or are on the verge of closure," it said.
According to mill sources some 10-12 mills have already closed due to raw jute shortage caused by government control on pricing.
Appreciating Modi's supportive stand on manufacture of biodegradable packaging material, IJMA said its environmental friendly credentials of making 100 per cent biodegradable and multi-use bags will go a long way in achieving his pledge for net zero carbon emission by 2O7O.
The jute industry had introduced lighter jute bags weighing 580 gms for packing food grains in December, 2016, IJMA official said. Adhoc pricing for the jute bags continue to this date.
The Tariff Commission has submitted its report on pricing of bags in March 2021 but is yet to be implemented, he added.