Jute exports improve, but still in negative territory

Earnings from jute exports, which went into free fall at the beginning of the current fiscal year, are now on the mend with prices of raw jute dropping to some extent – even though its growth still tanks 9% at the end of the July-January period.

A steep rise in raw jute price, shrinking global demand and skyrocketing freight costs had caused the exports, which registered around 32% rise in FY21, to slip into the negative territory with a big margin as high as 40% in July, according to industry insiders.

The anti-dumping duty imposed by India also played a part in dragging down exports. Bangladesh's exports of jute goods to the neighbouring country dropped by 60% in the wake of the protective measure that took effect in 2017, they say.

Data from the Export Promotion Bureau (EPB) shows in the first seven months of FY22, all exports except for jute and jute goods have witnessed a positive growth.

Abdul Barik Khan, secretary general at the Bangladesh Jute Mills Association (BJMA), told The Business Standard, "Buyers are reluctant to pay extra we spend on procuring raw materials that are now very costly."

Infographic: TBS

Esrat Jahan Chowdhury, director of the Bangladesh Jute Goods Exporters Association, blamed the skyrocketing prices of raw jute for a fall in jute exports. "We demand that raw jute pieces remain stable."

In normal times, raw jute was sold at Tk1,800-Tk2,200 per maund. Last season, the prices shot up to Tk6,000-Tk6,500. In the current season, the prices have come down a bit and are selling at Tk3,500-TK3,800.

Esrat Jahan thinks at present, the market for raw jute is somewhat stable. But if the prices stay within Tk2500, exports will increase and farmers will also survive.

According to the EPB, the jute exports, which fell by 41% in July of the ongoing fiscal year, has now improved with only 9% negative growth. 

Abdul Barik said many entrepreneurs are exporting products at a small profit to retain the buyers, while many others continued exports even at losses in some cases.

The jute and jute goods fetched $696 million in export earnings in July-January, a fall from $766 million in the same time a year ago, according to the EPB.

The list of exportable jute products of Bangladesh includes raw jute, jute yarn and twine, jute sacks and bags and other jute products. 

According to the EPB, exports of jute yarn and twine, jute sacks and bags declined in the last seven months, while exports of raw jute and other jute products increased. However, in terms of value, the sector's overall exports registered a fall.

RMG export 

Exports of apparel also saw growth in January. Apparel worth $4.8 billion was exported in the month, with around 43% growth. 

"This is the highest ever single month volume of RMG export," said Mohiuddin Rubel, director of Bangladesh Garment Manufacturers and Exporters Association.