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Problems & Prospects of Jute Industry in Bangladesh

Subrina Mahfuz Syeda Bashira Khatun Mrinaliny Bhoumick Farjana Jerin

Bangladesh being one of the leading jute producers of the world enjoyed the monopoly in marketing of jute and jute goods in the world market till mid-se enties! Bangladesh produces "!#-"!" million bales of raw jute annually out of which $-$!" m bales are e%ported and the rest are consumed by the local jute mills! &bout '#-'"( of the total jute goods produced in the country is e%ported! Bangladesh still meets "#-)#( of the world*s demand of jute goods and +#( of raw jute! More than ,"# composite and twine jute mills in public and pri ate sector of Bangladesh are producing more than )!" lac! & huge demand for arious di ersified jute products iz! carry-shopping bags. shoes. composite materials. geo-te%tiles. home te%tiles. handicrafts. gift items. pulp and paper etc! is continuously increasing in both local and foreign markets! /he future prospect of this eco-friendly natural fiber-jute is e%pected to increase day by day with effecti e support from the national go ernments of the producing countries through adoption of appropriate policies like banning of synthetic packaging materials and enactment of regulations fa orable towards its culti ation. di ersification and marketing!

Key 0ords1 Bangladesh Jute Mills 2orporation 3BJM24. Bangladesh Jute Mills &ssociation 3BJM&4.
Bangladesh Jute Spinners5 &ssociation 3BJS&4. 2oastal 6mbankment 7roject 32674. Jute Sector &djustment 2redit 3JS&24. Jute Sector 8estructuring 7rogram 3JS874. &damjee Jute Mills 3&JM4! &damjee 6%port 7rocessing 9one 3&6794. 6%port 7romotion Bureau 367B4. Bangladesh Bank 3BB4. Jute :i ersification 7romotion 2entre 3J:724. ;igh yielding ariety 3;<=4. Balancing. Modernization and 8ehabilitation 3BM84. ;uman 8esource :e elopment programme 3;8:74. 8esearch > :e elopment 3;>:4!

1 I!TR"#$CTI"!
Bangladesh with her location in south 6ast &sia has a long and rich historical and cultural heritage! /he jute industry in Bangladesh is primarily e%port oriented! 8aw fiber is e%ported along with jute manufactured goods! She has a population more than ,?# million! /otal area of the country is abo e ,?'."'# s@ km of which about ,,!A million 3'+(4 hectare is flood plain! Bangladesh is an agro-based economy accounting for A#( of countries B:7 and employing )"( of labor force! Jute is one of the major cash crops in Bangladesh! Ct is a rapid growing. photo-reacti e crop only ,$# days are needed for its har esting! /he Bo ernment owned BJM2 at present with about $# mills. running the bulk of the operational looms and the semi-pri ately owned BJM& with a total of 'D member mills! En the other hand there is the BJS& with o er "# spinning mills! /he downfall of jute was accompanied by the implementation of the 267. which enclosed the entire southwest coastal region of Bangladesh within about A# polders with ,")) km of high earthen embankments and $D$ sluices!

/he authors are the current students of the :epartment of Business &dministration. Forthern Gni ersity Bangladesh!A!

% "BJ&CTI'&S "( T)& ST$#*

/he objecti es of this research are1

/o know the present status of the jute industries!

/o identify the problems as well as the prospects of the jute industry! /o suggest measures for the healthy growth of jute industries!

+ ,&T)"#"-".*
/his paper has been prepared relying on primary and secondary information! 7rimary information has been obtained through a simple sur ey conducted on a number of public and pri ate jute industries and farmers who culti ate jute or not! Cnter iew was conducted with the concerned personnel of the respecti e organizations with the help of a semi structured inter iew schedule! Sources of pertinent secondary information included the arious publications of Bangladesh uni ersity journals. newspapers and websites!

/ R&S$-T A!# #ISC$SSI"!

/ 1 "0er0ie1 of Bangladesh Jute Industry Jute industry is one of the strong industrial sectors in Bangladesh! /his will enhance local demand for jute and gi e farmers and millers a buffer against a fall in demand abroad. where about +# percent of Bangladesh jute is now sold! 6mployer of nearly ,"#.### workers. suffered a nearly $# percent slump in e%port earnings in fiscal $##D-#+ due to a fall in prices!6%ports were on the rebound in $##+-,#. spurred by a rise in the price of the natural fibre on the world market! 6%ports soared ') percent to H'A) million in fiscal $##+-,#. from H?,' million the year before! &fter Bangladesh5s independence in ,+',. the go ernment pursued a program of nationalization of large manufacturing enterprises! Cn the early D#s. some rethinking led to a partial re ersal of this policy and o er "# percent of the mills 3A" out of ))4 under BJM2 were pri atized! Cn the +#s. the go ernment focused again on the jute sector problems through a restructuring program in order to create a commercially iable jute industry! ICn Switzerland as well as 6uropean market. it is the @uality. not @uantity. that matters and Bangladesh should e%plore market for four to fi e @uality jute products.J said &drian Brestcher. a SC77E e%pert! Cn the +#s. the go ernment focused again on the jute sector problems through a restructuring program in order to create a commercially iable jute industry! Supported by the 0orld Bank5s Jute JS&2. the go ernment put together a JS87 in ,++A to rationalize the cost structure in the jute industry and to introduce mechanisms through which financial discipline and accountability could be established!

Sale in dom estic & international m arket (%)

90 80 70 60 50 40 30 20 10 0

D omestic sale International sale



2000 Y ears



(igure2 Sales of Jute Cn $##$. jute sector reforms got a new lease of life with the closure of &JM! /his alone led to a decrease in BJM25s losses from /k!A!+ billion in F<$##$ to /k!$!, billion in F<$##A! Ct also led to an increase in BJM25s producti ity. which jumped from roughly /k! $".### per employee in F<$##, to /k! A+.### per employee in F<$##A! /he con ersion of &679 in $##) is a landmark in the country5s economic management and industrial de elopment history! &ll de eloped plots ha e been allocated to both local and foreign companies and as of January $##'. industries in operation ha e created direct employment for A?.### people! Ence fully operational. &679 is estimated to employ '#.### people! /he closure of &JM resulted in loss of $".### permanent jobs and ".### temporary jobs! /he deteriorating performance of BJM2 mills did not ha e an unfa orable effect on the total production of jute. which has remained relati ely stable between "##.### to )##.### metric tons! Cnstead. there has been major product re-orientation1 from traditional products such as hessian. sacking and 2B2. to yarn and twine! /he share of traditional products in total production has fallen from D# percent in the early +#s to ?" percent in F<$##). with yarn-twine now making up more than half of total production! Since F<$###. e%port earnings of the spinning sector ha e grown at an a erage ,$ percent annually and account for )# percent of e%port earnings 3GSH,D# million4 from jute goods!

/ % &3ports of 4ute goods

Bangladesh e%ports raw jute and jute products in around ,"# countries while only raw jute goes to /urkey. Belgium. Cran. Spain. Syria. Gzbekistan. 2hina. Cndia and 7akistan! /he price of raw jute in international market is H,$## per tone while it was around H)## during the same period in the pre ious year. according to the industry sources! But now Bangladesh Bo t! wants to increase the profit of jute goods! So they emphasize on e%porting jute goods rather than raw jute! Jute and jute goods e%port set a new record in the outgoing fiscal year. mainly due to hike in prices of raw jute in international market and growing demand of eco-friendly di ersified products across the globe!

2arpet yarns. jute sackings and jute bags are the top selling products. now enjoying huge demand in 6ast Jute. or burlap. is reclaiming its lost glory as consumers find in it an en ironmentally friendly alternati e to plastic shopping bags! 6urope. Middle 6ast. and central &sian countries! /he country*s e%port of jute and jute goods posted ')!?A per cent growth in July-June period of $##+-,#. earning a total of GSH'A)!?? million. according to statistics by 67B! 6%port of jute yarn and twine enjoyed DD per cent rise in the same period in fiscal year $##+-,# against the corresponding period of the pre ious fiscal. earning HA+'!)+ million! Besides. e%port of raw jute enjoyed A$!?) per cent growth in outgoing fiscal year than the pre ious year! /he earnings from raw jute were H,+)!$' million in $##+-,# while H,?D!,' million in $##D-#+! /he 67B statistics re ealed Monday that the jute and jute goods ha e secured the position of the second largest e%port item from Bangladesh! /he go ernment disbursed about /k ,) billion as cash incenti e among selected e%port sectors in the just concluded $##+-,# fiscal 3F< *,#4. according to the final data of BB! /he amount was the highest in a single year since $##,-#$. a top official in the BB said! 2entral bank figures show. only /k #)!# million was disbursed as cash incenti e in $##$-#A. /k ,# million in $##A-#?. /k ?# million in $##?-#" and /k ,?!,, billion in $##"-#)! Table5%2 Production and &3port of Ra1 Jute <ear 7roduction 0orld 3& g4 $###-$##, $##,-$##$ $##$-$##A $##A-$##? $##?-$##" $##"-$##) ,$)!)" ,?D!D, ,"#!"+ ,""!)$ Bangladesh 3& g4 ?"!$) ",!A' ")!D" "A!A# ?+!D) )A!$) Share Bangladesh 3& g4 A"!'? A?!"$ $+!$' A?!$" of 6%port 0orld 3& g4 ,)!DA ,)!?' $)!#A ,+!,' Bangladesh 3& g4 ,"!"" ,?!,, $"!,+ ,+!#" ,'!#? $?!?' Share Bangladesh 3(4 +$!A+ D"!)' +)!'' ++!A' of

Exports share %

e x p o r t so fr a wju t e
1 0 5 1 0 0 9 5 9 0 8 5 8 0 7 5 2 0 0 0 2 0 0 1 2 0 0 1 2 0 0 2 y e a r 2 0 0 2 2 0 0 3 2 0 0 3 2 0 0 4 e x p o r ts h a r e%

(igure2 &3ports of Ra1 Jute

Table5+2 Production and &3port of Jute .oods <ear 7roduction 0orld 3& g4 Bangladesh 3& g4 ?!DA "!A) "!,) "!,' "!$? "!)+ Share of 6%port 0orld 3& g4 )!?? )!?A )!') '!,) Bangladesh 3& g4 ?!$? ?!?, A!+D A!D+ ?!$# ?!?# Share of

$###-$##, $##,-$##$ $##$-$##A $##A-$##? $##?-$##" $##"-$##)

Bangladesh 3(4 -

Bangladesh 3(4 )) )+ "+ "? -

Export share %

J u t eg o o d se x p o r t s
8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 2 0 0 0 2 0 0 1 2 0 0 1 2 0 0 2 Y e a r 2 0 0 2 2 0 0 3 2 0 0 3 2 0 0 4

E x p o r ts h a r e%

(igure2 &3port of Jute .oods From the diagram it appears that the e%ports of raw jute has been increasing o er the years! 0hile e%port of jute goods has been decreasing! But e%port of jute goods can much increase if steps of Bo t! ha e taken appropriately!

Problems of 4ute industries in Bangladesh

Farmers in about ,# upazilas of greater Faridpur district are facing serious problem of absence of ade@uate water in canals and beels 3pond with static water4. as they are unable to carry out rating of jute! /his problem has gi en birth to a new practice! Jute farmers are taking ponds on lease where er a ailable in illages. for a month at the rate of /k "## K D##! /hese ponds were then filled with water with the help of low lift power pump for rating jute 3paat jag4! /his new practice or trend is widely practiced in &lfadanga. Saltha. Fagarkanda. Boalkhali. Madhukhali. Mokshedpur. Bhanga. Sadarpur. and Kashiani! Bo ernment has made a budgetary allocation of /k A## million to encourage culti ation of jute in $D districts for adoption of a technology called ribbon-retting. which is introduced by the Bangladesh Jute 8esearch Cnstitute to lessen wastage!


Cn recent weeks much has been written about the LcollapseL of the jute industry in Bangladesh. including heart-rending reports detailing the human tragedy in the jute mills in Khulna! /his collapse relates to the financial non- iability and the e entual closure of the publicly owned jute mills! /he jute industries are as follows1 Gna ailability of high yielding resulting in lower producti ity! Mow price of raw jute for which the farmers are losing interest to continue production of jute! ;igher production cost compared to competing countries! &bsence of cost effecti e modern jute culti ation systems moti ates farmers to take up other agricultural acti ities resulting in decreased jute production! Mack of practical e%perience for jute retting in modern system! Mack of ad anced technology-machines and una ailability of spare parts in some jute mills lead to use of obsolete machines resulting in reduced production efficiency! Eld machineries. low producti ity. irregular power supply. labour unrest and political unrest in the manufacturing sector! 2ontinued financial crisis in the public sector jute mills! 2ompetition of substitute synthetic products in international market as well as in the domestic market! Mow e%port price of jute goods in the o erseas market! Mack of skilled labour and skilled designers in the jute sector leads to production of inferior @uality products resulting in loss of competiti eness in the e%port market! Cnade@uate 8 > : facilities at both public and pri ate le els in the Jute sector leads to absence of continuous product inno ation resulting in loss of growth opportunities! Cnade@uate backward linkages in the Jute sector leads to import of accessories by local producers resulting in higher cost of production! Mack of market de elopment knowledge by the e%porters lead to ineffecti e promotion of products in both international and domestic markets resulting in loss of potential market opportunities! Mack of awareness of Jute di ersified products in the domestic market! Bangladesh Jute 8esearch Cnstitute 3BJ8C4 lacks close coordination with the Ministry of /e%tiles > Jute as well as Jute Cndustries as it is under the Ministry of &griculture! /his lack of coordination creates a problem in maintaining the supply chain of certified jute seeds on which the @uality of Jute fiber is-a- is the production of @uality Jute goods depends! Cndia imports jute bags from Bangladesh alone. such new order seems to ha e issued by the Cndian authority for discouraging jute-bag import from Bangladesh! arieties of jute seed leads farmers to use poor @uality seed

arm er pro!lem s
#um!er of farmer 35 30 25 20 15 10 5 0
te w a


25 15 7 10 5 'eries1

" or

i& e

# er til i

re st ic



(igure2 Problems from (armers "pinion

Employees pro!lems
#um!er of Employees 35 30 25 20 15 10 5 0 30 26 #armer





)aw materials

*o&ern +echnolo,(

-o.t/ polic(

!ocal &eman&

International Deman&


(igure2 Problems from &mployees "pinion


ee &s

pi ta


35 30 25 20 15 10 5 0 #um!er of $a!or 29 30 18 'eries1

27 15 15

-oo& wa,e

tra&e 0nion

sa1t( allowance

2el1are pro,rame

continio0s wa,e



(igure2 Problems from -abors "pinion

,easures to "0ercome the Problems

BJM2 needs reforms and restructuring to impro e producti ity and efficiency and make use of the potentials for regaining the past glory of jute! 6ncouragement of domestic use of jute goods. enhancing research and de elopment acti ities. de eloping a /echnology Gp gradation Fund. strengthening the search for jute goods market. ensuring ade@uate funds for repayment of all arrears of workers and dues to suppliers. amortization of debt. ensuring greater autonomy to BJM2 mills pri atization of jute mills in a cost-effecti e and efficient manner! ;<= of Jute seeds should be a ailable at farmers5 le el! /he Jute industries in Bangladesh need immediate BM8 7rogramme to increase the producti ity and lowering down the production cost! /he remunerati e price of Jute fiber should be ensured at growers5 le el! /he Bo ernment should take strategic policy measures for the promotion of jute sector in short. medium and long terms! /he Jute industry lacks ade@uate trained human resources at all le els of production. a need assessment and comprehensi e 3;8:74!should be prepared in consultation with the Cndustry and implemented through the channels of e%iting educational-training Cnstitutions! Cn iew of the banning of polythene. there is an urgent need for de elopment of cheaper jute bags! For these 8>: organizations both go ernment and pri ate should put their concerted efforts into such de elopment! /he Bo ernment should be approached to set up some sort of mechanism to ma%imize internal usage of di ersified new jute products including usage by the rele ant go ernment departments! /he Bo ernment should gi e mandatory order to use Jute bags as packaging materials for specific sector like food grain. cement. sugar. fertilizer etc! /he go ernment may consider creating a technology up-gradation fund for the jute sector!

#i0ersified Jute Products

Bangladesh is ery rich in bio-di ersity! & wide range of flora is found here! /hough Bangladesh is famous for jute and allied fibers. garments industries swept in and ha e de eloped due to relati e ad antage > cheap labor cost! &s there is the Multifiber concept of blending jute with other natural and synthetic fibers. jute has bright future for using them in the arious te%tile areas! /aking in iew the prospects. /he Bo t! of Bangladesh has started the di ersification of jute uses with its limited resources! Ct needs wide support for production and marketing of such di ersified products! 2onse@uently the Bo t! of Bangladesh initiated policy programme for the production of di ersified jute goods through pri ate sector! /o e%ecute this programme. J:72! /he objecti e of J:72 is to pro ide e%tension ser ices to the pri ate sector for establishing Cndustry for the production of high alue added di ersified jute products! &mong the arious di ersified jute products. floor co ering. new te%tiles. technical te%tiles. geote%tiles. jute nonwo ens jute reinforce composites. pulp > paper. particle boards. shopping bags. handicrafts. fashion accessories. apparels ect! ha e potential for wider use > application!

Prospects of Jute Industries

6%citing prospects are now there for new jute-based products! &mong other products can be made of jute. paper is now reported to be one that may use jute plants as a superior raw material for its production! /he $,st century is the century of biology which is mainly focused by genome research! /he de eloped countries ha e already captured this drift of this research and many de eloping countries are underway to follow them! Being a de eloping country. it5s high time for Bangladesh to start acti ely thinking about this! Cf appropriate mo es are taken at the international le el. the use of synthetic fibers can be prohibited worldwide and opportunities can also be created for the use of natural fibers. instead! Many prospects could also be created then for the use of jute products in the automobile industry! But the e%ploiting of all such opportunities would re@uire sound plans and their implementation! Jute is best culti ated in the country. but we do not utilize it here. rather the yarn mills e%port all the yarn! /here is a good prospect of Jute and Jute products which is described in brief below1 & global consciousness has already de eloped against the use of artificial fibers and synthetic products. which are now being replaced by the en ironment friendly jute goods! /he Bo t! of Bangladesh banned production. sale and use of polythene from #, March. $##$! &s a result the demand of Jute > Jute goods is increasing! /here is a huge local demand of jute stick as a primary substitute for diesel-wood! Moreo er. Jute sticks are ery useful material for arious purposes as fencing and roofing materials for making sheds! :ue to increasing price of Jute > Jute goods more entrepreneurs 3SM6s4 are entering the market for Jute business and introducing new Jute :i ersified 7roducts! Jute is a rapidly growing crop with ,$# days for its production! Cn addition. Jute and Jute products are renewable. biodegradable. eco-friendly. easily disposable and natural commodity!

Bangladesh jute industry is based on old technology and machinery! Few technologies for production of di ersified jute products are now a ailable! Jute is one of the most ersatile natural fibers used as raw material for packaging. te%tiles. the nonte%tile and agricultural sectors! Some jute products are naturally fire resistant! /he first and foremost strength of the Bangladesh Jute Cndustry is that it is based on the raw material that is a ailable at the doorstep! Bangladesh is the natural abode of jute culti ation on account of its climatic situation and soil condition! /he farmers should made conscious about the jute culti ation. how to grow. how to rip. how to get good jute > how will be the jute color good etc!

/he culti able land is decreasing due to increase of population day by day!

/o meet the demand farmers moti ate to take up high earning agricultural acti ities resulting in
decreased Jute production!

0ater is necessary for Jute retting! Scarcity of water will threat jute retting in future resulting
moti ates farmers to take up other agricultural acti ities!

Ether countries ha e successfully established a fa orable image of their jute di ersified products
in the international market!

Cndian. 2hinese and =ietnamese jute di ersified goods are more popular because of their product
range and depth. colors. designs and @uality!

6%tensi e go ernmental support in the jute sector by neighboring countries made their Jute
products more competiti e in international markets!

Bangladesh can claim as a country of jute as e ery where in this country jute and allied fibers can be grown! Bangladesh has got relati e ad antage on the production of best @uality jute fiber! /hough uses of traditional jute products are declining jute has ersatile intrinsic and e%trinsic properties! So a wide range of di ersified jute products can be produced by e%ploring these properties! /hese di ersified products are biodegradable. photo biodegradable. non to%ic. non plastic. acidic. hydrophilic. high absorption of G= capacity > moisture. eco-friendly and easy disposability! /hese products not only preser e en ironment but also help to protect en ironment from degradation! Mulitfiber-2omposite 2oncept with ertical and horizontal di ersification application areas of jute > jute products can be e%plored in wide dimension! Cn fact scientific and technological information of production of these di ersified jute products are more or less a ailable! Ct needs concerted and international inter ention to de elop marketable di ersified jute products on needs basis! & huge potential market of these products is created in the de eloped countries!


Mast we forget. the jute industry was the life blood of our economy for se eral decades > continues e en today! &bout ," million farmers are in ol ed in growing this cash crop > se eral million more of our population. perhaps an e@ual number. is in ol ed with its processing. transportation. con ersation etc! /he era of jute is not ended! Ct is the beginning of jute in new :imensions > 7erspecti e!

/he 7rothom &lo. July$". $#,#! /he Cttefa@. JuneA#-July'. ,,. ,A. ,?. $?. $#,#! /he :aily Star. July. $#,#! Fibre$Fashion Fews :esk. July #,. $$. $#,#! /he Financial 6%press. July$+-&ugust". $#,#! /he :aily /imes. July$". $#,#! En Cnternet arious webpage5s on jute!