Shifting our focus on the product of the year
Jute has been officially designated as the product of the year 2023. The objective is to highlight jute and take measures to develop it, enabling it to be marketed internationally
Every year, during the inauguration of the Dhaka International Trade Fair (DITF), a particular product or sector is designated as the "Product of the Year". In the past, leather goods, pharmaceutical products, agricultural and agro-processed products, light engineering products, and IT and IT-enabled services were chosen as the product of the year for the years 2017, 2018, 2019, 2020, and 2022, respectively.
Regrettably, the Covid-19 pandemic rendered the organisation of the DITF by the Export Promotion Bureau (EPB) unfeasible in 2021, and no product was selected for that year.
The primary objective of this initiative is to highlight a specific product or sector and take measures to develop it, enabling it to be marketed internationally. And during the opening ceremony of the 27th edition of DITF, the Prime Minister announced jute products as the product of the year for 2023.
Subsequently, on 23 February 2023, the Golden Aansh (Jute) was officially recognised as an agricultural product in a publication in the Bangladesh Gazette. As such, jute holds significant importance in terms of development and diversification during the current year.
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Prior to the Liberation War of Bangladesh, the prominent jute mill owners were the Bawani, Adamjee, Ispahani, and Daud families, along with a significant number of small-scale units.
Following the country's independence, the government established BJMC in 1972 to regulate the operations of these jute mills. Presently, at least 220 private jute mills are operational. Additionally, several companies manufacture jute goods to meet domestic demand and export to overseas markets, despite not having their own jute mills.
During our school years, teachers often assigned us to write paragraphs or essays on the "Golden Fibre of Bangladesh," which we were required to memorise for exams. Jute was regarded as the most significant cash crop of Bangladesh due to the significant foreign exchange earned through its export.
It is a matter of grave concern that the export of this valuable commodity is not increasing at a significant rate. The global rise in the production and marketing of plastics is gradually eroding the position of jute products. If this trend continues, we will not be able to shield ourselves from poor export turnover, along with health and environmental hazards.
Jute, being an extremely versatile crop, has numerous practical applications. In rural areas, jute leaves, bark, and sticks are widely used due to their various beneficial properties. From a commercial standpoint, jute bags are a popular product and different types of bags made from jute rank highest on the list of jute-based products.
Despite the adverse impacts of the Covid-19 pandemic and the Russia-Ukraine conflict on global economies, the size of the global jute bag market increased from $2.26 billion in 2022 to $2.59 billion in 2023, representing a Compound Annual Growth Rate (CAGR) of 14.3%.
According to the IMARC Group, the market size of jute bags is anticipated to reach $3.84 billion in 2027, with a CAGR of 10.4%. In Bangladesh, the jute industry contributes 1% to the country's GDP, but accounts for 3% of the overall export earnings.
In Bangladesh, two types of jute are cultivated: white jute (Corchorus capsularis) and dark-coloured jute (Corchorus olitorius). Bangladesh is the second largest producer of jute in the world, but it is the leading exporting country, according to data from 2022. From the 2014-15 financial year to the 2020-21 financial year, jute production in Bangladesh amounted to 95, 108, 146, 133, 72, 59, and 310 thousand metric tons, respectively.
The demand for jute and its products in both domestic and international markets has been consistently increasing. Given that the jute sector is labour-intensive, it has the potential to create more job opportunities in production, processing, marketing, and exportation.
Bangladesh boasts a diverse range of jute products, numbering 285, which are exported to the world market. These products include raw jute, jute hessian, bags, sacks, ropes, jute twine, yarn, carpets, caps, mats, carpet backing cloth, packing materials, wrapping cloth, tapestries, fruit baskets, pen cases, wallets, curtains, chair covers, jute sheets, jute yarn waste, tarpaulins, canvas, hydrocarbon-free jute fabrics, geotextiles, pulp and paper, household products, and non-woven textiles, among others.
Jute sticks are a major source of fuel in rural areas of Bangladesh, while a healthy drink made from jute leaves has emerged as a promising export product with proven effectiveness in controlling diabetes.
In addition to traditional products, jute is now being used to create modern fashion items such as sarees, shirts, punjabis, shoes, sandals, briefcases, files, folders, and diaries – expanding the scope of jute's potential.
Jute products offer users a unique connection to nature, inspiring a deeper appreciation for the natural world. The plant's tender cuttings, for instance, can be used as a delectable vegetable renowned for its taste and medicinal properties in Bangladesh.
Jute bags and ropes, on the other hand, are incredibly robust and long-lasting. Fashionable jute products also readily attract consumers, while high-quality jute souvenirs remain popular options. As a result, jute goods are in high demand both domestically and internationally.
Jute is renowned for its soil-friendly properties and the resulting recyclability of jute products, which are compostable and biodegradable. Jute plants are fast-growing and require minimal water. Over the course of a growing season, a single hectare of jute can release up to 11 tonnes of oxygen and effectively purify the air.
In addition, jute cultivation enhances soil quality and mitigates the risks associated with pests and diseases. Minimal fertiliser, herbicide, and pesticide usage is required, with crop rotation being the primary recommendation for bolstering soil fertility and maximising future yields.
It is becoming increasingly apparent that we should prioritise our relationship with jute over plastic. Research indicates that plastic bags are responsible for the deaths of around 100,000 aquatic animals annually, including whales, dolphins, turtles, and penguins, who inadvertently consume them as food.
Moreover, plastic bags are not biodegradable; in fact, scientific analysis indicates that it may take as long as 2,000 years for plastic to decompose completely. This means that even in the next 20 generations, no discernible decomposition of plastic products will occur. The production of plastic also necessitates 60-100 million barrels of oil, which contributes to the depletion of global petroleum reserves.
Exposure to the toxic chemicals contained in plastic products can increase the risk of ulcers, asthma, brain inflammation, obesity, heart disease, and certain cancers. Moreover, plastic waste significantly clogs water and sewage systems, resulting in pollution of air, water, and soil.
Plastic products can also damage the natural food chain. Recent reports project that by 2050, there will be more plastic waste than fish in the oceans. Alarmingly, of the 67.5 million metric tons of plastic waste, approximately 1 million metric tons, enter the oceans every year. Even more concerning is the fact that nine out of ten ocean plastic polluters are from Asia.
In addition to satisfying local demand, Bangladesh is a significant exporter of jute products. The country exports a wide range of jute goods under HS Codes 5303, 5307, 5310, 5603, and 6305, respectively. Over the last five years, beginning in 2017-18, the export earnings from these codes were US$ 1,289.95 million, 1,078.80 million, 1,129.03 million, 1,537.02 million, and 1,601.50 million, respectively. It is believed that optimal production levels and a conducive business environment could yield even more significant outcomes for jute exports.
Bangladesh exports jute products to more than 100 countries around the world. Some of the major importing countries include Australia, Belgium, Brazil, China, Djibouti, Germany, India, Indonesia, Ivory Coast, the Republic of Korea, Pakistan, Russia, the United Arab Emirates, the United Kingdom, the United States and Vietnam.
The Seven Sisters of India, namely Mizoram, Tripura, Meghalaya, Manipur, Nagaland, Assam and Arunachal Pradesh, are the largest importing partners of Bangladeshi jute and jute products.
However, market analysts predict that the recently imposed anti-dumping duty by the Indian government may have some adverse effects on exports to these destinations. It is expected that formal dialogues between the two countries will bring about the desired results in solving this issue.
The government of Bangladesh has recognised the importance of jute and its diversified products, and has taken steps to promote the export of these products. The sector has been declared as the 'highest priority sector' in the export policy for 2021-24.
The Export Promotion Bureau (EPB) is organising international fairs to showcase jute products, attract investors and entrepreneurs, and promote this sector. Jute fairs are also being held locally under the initiative of the Ministry of Textiles and Jute. Participation in general and product-based fairs continues to serve as a strong platform for seeking foreign buyers.
The export policy includes provisions for commercial banks to encourage jute exporters by providing loans at lower interest rates and service charges. An integrated action plan is being developed to address the challenges faced by the sector, and the government is providing support for the establishment of design centres for diversified jute products.
Assistance is also being provided for procuring and using modern machinery for jute cultivation in a scientific manner. The government is also providing support for participation in international trade fairs and exhibitions.
To ensure the competitiveness and sustainability of jute goods in the international market, cash subsidies ranging from 7% to 20% are being provided. By declaring jute as an agricultural product, ambiguity in its proper classification in customs formalities will be removed. These initiatives are expected to further promote and strengthen the jute industry in Bangladesh.
Several organisations, including the Ministry of Commerce, Jute and Textiles, and Agriculture, are implementing various action plans, studies, surveys, programs, projects, seminars, workshops, fairs, and promotional activities to raise public awareness for the cultivation of more jute.
By increasing production, jute products will be able to meet the demands of both the domestic market and the international market for exports. It is imperative that all stakeholders work together with a shared mission to restore the glorious heritage of our golden fibres through increased exports.
Despite the discovery of the jute genome in 2010, the modernisation of jute varieties has yet to gain momentum. Improving the yield and fibre quality of jute by inventing new varieties is crucial.
However, the jute production sector remains relatively small and has not adopted modern technology. Furthermore, high-value products for developed markets such as the Middle East, the United States, and the European Union are not being produced.
There has been limited success in developing the Bangladeshi brand of jute products by our entrepreneurs. Many entrepreneurs and traders are not familiar with international marketing channels, which are widely popular worldwide.
Natural disasters often reduce productivity in rural areas, and some entrepreneurs blame the increased cost of fertilisers, irrigation, seeds, pesticides, and transportation for their lack of success.
The closure of some jute mills is also cited as a reason for the industry's backwardness. The government cannot continue to bear substantial losses indefinitely. Regardless of the reason, it is necessary for the national interest to improve the production and marketing of jute goods.
Despite numerous studies on the subject, there is still a significant gap between jute growers and middlemen/marketers. The implementation of various research recommendations appears to be a long-term issue.
It is worth noting that the government has declared the National Jute Policy-2018, which prioritises the production of quality jute, ensuring fair prices for jute, diversifying jute goods, modernising jute mills, and expanding the market for jute products.
The policy enables exporters to cultivate, process, and produce diversified products, attract foreign direct investment, and penetrate new global markets. Additionally, the policy includes provisions to create a Technology Upgradation Fund.
Bangladesh Embassies located abroad can play a significant role in providing information on potential markets and buyers. It is time to motivate cultivators to take steps to grow jute abundantly and for business entities to restart with a congenial trading process.
Encouraging researchers, entrepreneurs, policymakers, and the business community to invest in finding alternatives to plastics is crucial. Jute, being a golden fibre, biodegradable material, cash crop, and healthy life-giver, has the potential to save future generations from many unwanted risks. Therefore, exploring jute as a potential solution to unexpected problems is vital for a sustainable future.
Bangladesh has a long-standing tradition of cultivating, using, and marketing jute and its products. To improve the quality of life of the growing population in the country, individuals from all walks of life must come forward to find a proper complement to food production and healthy living.
Top priority should be given to promoting export trade, which can create sustainable economic conditions by generating employment and earning foreign exchange. In light of the harmful effects of plastic products, eco-friendly jute products should be considered essential materials for daily life.
In general, there is no alternative but to work towards accelerating the development of the overall economy of the country by increasing jute cultivation, diversifying jute products, saving human and animal lives, preserving the environment from pollution, increasing foreign exchange earning capacity, creating employment, and expanding exports.
In this regard, the participation of Bangladeshi exporters in international trade fairs can be expanded under the auspices of organisations related to the country's export promotion. Export growth can be a highly effective means of creating a significant inflow of foreign exchange and contributing to the country's development as a smart Bangladesh.
Mohammed Shahjalal is the Director of Export Promotion Bureau
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
