India’s jute production records loss of ₹1250 cr; mills may demand relief from Centre

In West Bengal, which is the highest jute producer in the country, permission has been given by the state government to operate 40 of the 60 mills that sent applications seeking resumption of operation

Indian jute manufacturers have said the lockdown has so far resulted in loss of production of I.5 lakh metric tonnes worth ₹1250 crore and it may appeal to the Centre for a financial package for survival of the industry.

The future of over three lakh jute mill workers and 40 lakh jute farmers hang in the balance and if the situation persists it may result in permanent sickness and closure of mills, according to Indian Jute Mills Association.(HT PHOTO.)

“We have watched the announcements made by the Centre. We will see what is announced over the next few days and take a decision on approaching the Centre for a relief package,” Raghavendra Gupta, Chairman, Indian Jute Mills Association (IJMA), told HT after Union finance minister Nirmala Sitharaman announced several packages for the micro, small and medium enterprises (MSME) sector on Wednesday afternoon.

Set up in 1884, IJMA is the apex business chamber for India’s jute industry.

In West Bengal, which is the highest jute producer in the country, permission has been given by the state government to operate 40 of the 60 mills that sent applications seeking resumption of operation, Gupta said. But the mills are operating with limited manpower owing to social distancing norms. “The nationwide loss stands at ₹1250 crore,” Gupta said.

“The jute industry is grappling for survival after being in lockdown for over one and a half months now. Already 1.5 lakh metric tonnes of production of jute goods has been lost estimated to be valued at Rs.1,250 crore. With the cash flow drying up, jute mill companies are finding it extremely difficult to make ends meet,” IJMA said in a statement on Tuesday.

Gupta said the future of over three lakh jute mill workers and 40 lakh jute farmers hang in the balance and if the situation persists it may result in permanent sickness and closure of mills.

“Jute industry’s loss has been plastic industry’s gain. Continuous dilutions under the provisions of the Jute Packaging Act have taken place over the lockdown period. Already about 3 lakh bales of orders for jute bags have been diverted to PP/ HDPE industry. If the lockdown situation continues any longer, further dilutions cannot be ruled out,” IJMA said.

The carryover of raw jute at the end of the jute crop year 2019-20 is now expected to be over 22 lakh bales, IJMA has said. “With reports of normal sowing this year, across all jute growing areas, the prices of jute fibre has fallen below the Minimum Support Price of Rs. 4,225/- per quintal for TDN3 grade,” it said.

To ensure safety of workers during production, the IJMA had deployed the global consultancy company Pricewaterhouse Coopers to work out standard operation procedures (SOP) for running jute mills.