Jute goods export hits $1bn on the back of value-driven growth

Bangladesh’s jute and jute goods exports jumped nearly by 32 percent in the just-concluded fiscal year compared to the previous fiscal year.

Exporters attributed the higher growth rate to the sharp increase in the value of the goods.

There was no growth in quantity as the pandemic dampened the global demand and slowed down the economic recovery in many countries, they said.

“Lower production in last season lifted the raw jute price three times higher to over Tk 6,000 a maund (40kg). We had no option but to increase the price,” said Bangladesh Jute Spinners Association Secretary General Shahidul Karim.

Though the association is yet to compile the export data from its members, he said in terms of quantity export did not grow.

Of the total jute and jute goods export in FY 2020-21, yarn and twine made by jute spinners accounted for 69 percent.

The country during the FY 2020-21 exported goods worth $1.16 billion soaring 31.63 percent in the same period a year earlier, according to the Export Promotion Bureau.

“Last year’s jute production was 40 percent lower than that of a year ago, pushing up the price of jute and jute goods,” said Bangladesh Jute Diversified Products Manufacturers and Exporters Association General Secretary Rashedul Karim Munna.

“Price of per tonne yarn reached $2,200 from $1,400 in the previous year. So, our earnings from jute yarn increased significantly,” said Munna.

In terms of volume there was no growth, he said.

Golden Fibre Trade Centre Managing Director Mushtaq Hussain has been engaged in jute trading for around 40 years said, “Value went up, but not volume.”

The price of a maund of jute shot up to Tk 6,500 last year, up from the usual Tk 2,000 to Tk 2,400. A farmer has to spend Tk 1,600 to Tk 1,800 for producing a maund of jute, according to him.

He said that farmers did not benefit from the price rise, rather some hoarders pocketed huge sums of money from the usual price hike of jute last year.

The government offers cash incentives - ranging from 7 percent (for yarn) to 20 percent (for diversified products) against jute and jute goods exports.

The average production of jute in Bangladesh is slightly over one million tonnes, of which around 70 percent are consumed locally and the rest portion is being exported, according to the Bangladesh Jute Mills Corporation.

Jute and jute products are currently exported to a handful of countries, including Afghanistan, Algeria, Austria, Belgium, Benin, Brazil, Canada, Chile, China, Congo, Egypt, Italy, Indonesia, Germany, India, Ireland, Iran, Korea, Malaysia, Mexico, Myanmar, Netherlands, Pakistan, Poland, Portugal, Russia, Saudi Arabia, Taiwan, Tajikistan, Thailand, USA, UK, Uzbekistan, and Vietnam.