Govt all set to ‘cap’ prices of raw jute as it is on rise

The jute cultivation and jute industry that faced huge losses and shortage in production due to floods in West Bengal last year is a cause of concern for the government as the price of jute, that is one of the cheapest items India produces, is on rise, said a senior official in the Ministry of Textiles.

Raw jute prices have already touched an unprecedented high of Rs 54,000 a tonne, twice the level of Rs 27,000 per tonne in the year-ago period. Mill owners and traders feel commercial intervention by JCI would spike raw jute prices to the level of Rs 60000 a tonne.

With jute products already become costlier, their prices may shoot up further as the Centre is contemplating a decrease in subsidy on the ‘golden fibre’.

Following a letter written dated Jan 14, 2016 from the Ministry of Consumer Affairs, Food & Public Distribution, SR Gaikwad, Director (Jute), Ministry of Textiles, to the Jute Commissioner of Kolkata that due to the current steep hike in the price of raw jute, the price of jute bags has also increased, resulting in a higher burden of subsidy to be given by the Central government for purchase of jute bags.

It has been noted that even after the drive by the state government for dehoarding of raw jute stock, the prices have further increased after November 2015.

In order to check the possible price rise of jute bags and reduce the burden of subsidy on the Central government, it has been requested that the prices of raw jute or B Twill jute bags be capped at the level of average price of November 2015.

In the current year, the minimum support price (MSP) of raw jute is pegged at Rs 27000 per tonne while prices are double the MSP at Rs 54,000 per tonne. B-Twill sacking bags prices have touched an all-time high of Rs 77,000 a tonne while Hessian has moved beyond Rs 1,00,000 per tonne.