Exports of the country’s jute sector have faced severe setbacks in recent weeks as export earnings from the sector have declined by more than 52 per cent in the first quarter of the current fiscal (2013-14). Jute exports, according to sources, have declined considerably because of a dull international market and the steep fall of India’s rupee against the dollar, which pushed up the neighbouring nation’s import costs. The export orders for jute and jute goods fell drastically, both in traditional markets (Iran, Syria, Jordan) and new markets (Ghana, Thailand) because of various reasons.
According to data released by the Export Promotion Bureau (EPB), the country earned a total amount of USD 205.52 million by exporting jute and jute goods during the first quarter (July-September) of the current fiscal as against USD 251.19 million during the same period in the last fiscal, registering a negative growth of 18.18 per cent. The figure is also 26 per cent less than the strategic target of USD 277.72 million fixed for the period.
The country experienced a serious setback in case of exports of raw jute, which registered a negative growth of 52.96 per cent during the period as against the earnings during the same period in the last fiscal. The amount is USD 24.97 million as against USD 53.08 million during the same period in the last fiscal year.
India is one of the key markets for Bangladesh’s jute and jute goods, which account for about USD 330 million annually. But the continuous depreciation of the Indian rupee has discouraged imports. Last month, the rupee slumped to a record low of INR 68.89 against the US dollar, a 25 per cent fall in value since the year began. Jute exports to India are being seriously affected as a result of these price differences.
A dull international market pulled down both the volume and value of raw jute exports this year. Sources said the export figures went down because buyers from a number of countries were very reluctant to buy raw jute this year.
The continuous depreciation of the Indian rupee has also put India at an advantageous position in the international market as it can offer its own products at a cheaper rate, thereby putting heavy pressure on Bangladesh’s products.
India, according to sources, offers USD 90 per 100 pieces of sacks against Bangladesh’s rate of USD 105 in the international market, which attracts foreign buyers, including Thailand, one
of the largest jute good importers. The Thai government recently made it mandatory to use jute bags in packaging rice.
The demand for raw jute from China and Pakistan was also low this year. Exporters said raw jute exports declined as China imported lower amounts of jute this year compared to the previous fiscal.
Private sector exporters also blamed difficulties associated with the payment realisation mechanism with Iran apart from the depreciation of the Indian rupee against the US dollar for affecting the export of jute goods to Iran and India, the two major destinations for jute exports. “The ongoing economic sanctions on Iran and Syria have also hurt jute exports in those countries, as buyers are unable to pay because of the shortage of international currencies and difficulties in making payments,” said an exporter.
Export earnings from jute sacks and bags, however, also went down significantly this year, registering a negative growth of 28.70 per cent over the same period last year. According to the EPB, the country earned USD 39.98 million in the July-September period against USD 56.07 million during the same period last fiscal.
The earnings are also 43.56 per cent below the strategic target fixed by the government for the period. The target was USD 70.80 million for the period.
Export earnings from jute yarn and twine also decreased by 1.49 per cent during the period. The EPB calculated that an amount of USD 126.94 million was received against the exports of jute yarn and twine this year. The earnings were recorded at USD 128.86 million during the same period last fiscal. The government fixed a target of USD 1.163 billion earnings from the sector at the end of this fiscal against the total earning of USD 1.030 billion from the sector in the previous fiscal (2012-13).
The jute sector, sources said, is passing through a crucial time as the markets in the Middle East have been shrinking amid sanctions against Iran by the Western nations and the protracted political turmoil in Syria and Egypt. The Eurozone recession, too, has had an impact.
“Uncertainty over demand for jute prevails in the global market. Buyers who had earlier placed orders for six months have reduced their purchase volumes to meet short-term demand,” said Bangladesh Jute Mills Association (BJMA) secretary A. Barik Khan.
-With The Independent input
