The ban has landed a large number of raw jute sellers in Bangladesh and Indian jute mill owners in a soup. These companies had entered into large contracts and letter of credit and telegraphic transfer in advance.
As per formal commitments, about 50000 metric tonne of raw jute are involved in these already settled contracts. The imposition of ban will result in non fulfillment of this contract which will cause immense financial hardship to the jute mills, mainly in West Bengal, said IJMA Chairman Manish Poddar.
Significantly, West Bengal houses 64 of the total 84 jute mills in the country, which is more than 75 per cent of India’s jute capacity.
According to industry officials, at present, over 20 per cent of the jute mills in West Bengal are closed due to this crisis rendering over 50,000 jute workers jobless.
Jute mills in West Bengal till recently had been running at only 60 per cent of their capacity and a large number of workers had been rendered jobless. There was also a production cut of 30-40 per cent few months ago, thanks to lack of order.
The prevailing crisis in the jute industry had already triggered a 30 per cent rise in prices of the golden fibre and an artificial shortage created by hoarding.
Poddar said, that the ban on export of raw jute from Bangladesh imposed by an order dated December 2, 2015 needs to be withdrawn immediately in the interest of commerce between India and Bangladesh who are friendly neighbors and members of the SAARC Country.