Jute industry facing challenge over sudden demand to supply 30 kg bags

The jute industry facing challenge over the sudden demand from Punjab government for 30 kg jute bags instead of the regular 50 kg bags for packaging of wheat and other food grains and jute industry lacks the expertise to produce 30 kg bags.

Moreover, Punjab is the largest purchaser of jute bags in each Rabi and Kharif seasons for packing food grains. Over a third of the one million tonne jute bags produced for government buying is purchased by Punjab through the Food Corporation of India (FCI) in the Kharif and Rabi seasons.

Presently, the industry is capable of producing and supplying only 50 kg bags with each bag weighing 665 gms. The bags are used for packing of sugar and food grains under the provisions of Jute Packaging Materials Act (JPMA), 1987. The Act provides for a mandatory 100% reservation for jute bags for sugar and food grains for government procurement agencies.

The demand was recently placed by the Punjab government before the Union Food Ministry under the National Food Security Act. The Act is likely to come into effect from June this year. Punjab has proposed to procure 30 kg jute bags for packing 0.87 million tonne of wheat during the Rabi marketing season of 2014-15.

The requirement for 30 kg bags can also be derived by using the similar line of production used for manufacturing 50 kg bags, said a leading jute mill owner.

It is only the Bureau of Indian Standards (BIS) that can decide if the 50 kg specification (BIS 12650: 2003) can be used for 30 kg jute bags.

Raghav Gupta, chairman of Indian Jute Mills’ Association (IJMA ) said that they have already approached the BIS regarding specifications for manufacture of 30 kg jute bags. He believes the industry can manufacture such bags. They will immediately supply the 30 kg bags on receipt of demand.

Around 40% of jute bags produced is purchased by the Union food ministry through Food Corporation of India (FCI) on behalf of different state food procuring agencies. The jute sector has the capacity to manufacture around 1.2 million tonne of jute bags. The installed capacity is around 1.5 million tonne.

The other leading purchasers of jute bags for packing food grains and sugar are Haryana, Chhattisgarh, Uttar Pradesh, Bihar and Andhra Pradesh. Almost 30% of the 250 million tonne of food grains produced are packed in jute bags worth around Rs 6000 crore.

The current government price of jute bags is around Rs 52,000 per tonne.