Jute Producing Countries

1) India 2) Bangladesh 3) China 4) Nepal 5) Thailand 6) Myanmar

Production (thousand tones)
Countries 20061 2 3 4 India Bangladesh Myanmar Nepal 07 1 629.90 990.00 43.60 17.10 Years 200506 1 392.30 990.00 36.89 17.66

200405 1 193.60 810.00 33.63 16.89

Graphical fluctuations:

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Jute Production
Production (thousand tones) 1800.00 1600.00 1400.00 1200.00 1000.00 800.00 600.00 400.00 200.00 0.00
In di a ad es h ya nm Ne pa l ar

Year 2006-07 Year 2005-06 Year 2004-05

Ba ng l

Supplying/Exporting countries
1) Bangladesh 2) India 3) Thailand 4) Myanmar
5) China (Kenaf and allied fibres)

6) Nepal

Importing Countries

Africa (Alegría, Côte d’Ivoire, Ethiopia, Nigeria, Tunisia)

• Latin America (Brazil, El Salvador, Cuba, Nicaragua) • Egypt • Iran

M

2

Importing Countries contd….
• Saudi Arabia • Turkey • United states • Belgium • Germany • Netherlands • Spain • United Kingdom • Russia • Japan • Australia • China

India (Imports better quality jute from Bangladesh & from Nepal)

• Indonesia • Pakistan • Thailand

Commodity agreement terms: Changes in the International/Regional
1) Government of India and UNDP made a joint effort to

plan and assist technology development in the year 1992. In 1992, National Jute Program was designed with the help of UNDP. UNDP provide an assistance of US $ 20.35 million and Government of India allocated Rs. 500
3

million to revitalise the jute sector and to diversify the jute fibres to get higher value added products with the help of R & D programs.
2) The

International Jute Study Group (IJSG) is an

intergovernmental body set up under the aegis of UNCTAD to function as the International Commodity Body (ICB) for Jute, Kenaf and other Allied Fibres. At present IJSG has a total of 30 Members viz. Bangladesh, India, Switzerland including 27 member states of the European Community. The Private Sector Consultative Board (PSCB) is one of the vital parts of the IJSG in view of the increasing role of the private sector. IJSG has its website www.jute.org. The IJSG is working closely/jointly with Common Fund for Commodities (CFC), the Food and Agriculture Organization of the United Nations (FAO) and with International. Trade Centre - ITC (WTO/UNCTAD). 3) Normally, India imports these jute and jute items from Bangladesh, Jutes. 4) International Jute Study Group (JSG) at Dhaka and International Trade Centre (UNCATAD/WTO) are jointly preparing an action plan for sustained growth of jute industry with a special emphasis on development of high-speed modern machinery. The project which is funded by the Common Fund for Commodities (CFC), a global funding body, has already been prepared by
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Bhutan,

Maldives

and

Nepal.

Indian

Government is thinking to lift customs duty on Import of

Gordon Mackie, an international jute consultant and grandson of James Mackie, owner of the UK-based James Mackie & Sons, a world renowned jute machinery manufacturing company of bygone years. 5) Kolkata, November 19, 2007: Indian jute mill exporters have bagged two global jute tenders, this time floated by official Syrian agency Haboob for supply of 50,000 bales or 22,000 tones of sugar twills valued at Rs. 73 crore and another tender from Ghana for 48,000 bales or 14,000 tonne of food grade jute products worth Rs.43 crore. The successful bidders - all city based jute mills groups - are required to deliver the jute products within March next year. They have won the tenders as they quoted lowest prices, defeating other competitive bidders including BJMC of Bangladesh which happened to be traditional buying sources for Syria. Reports have it that Syria has been disenchanted by its failure of delivering the goods in time. Source: The Economic Times
6) Kolkata, September 20, 2007: The textile engineering

division under the institute Engineers (India) is pitching for wider application of technical textile in civil engineering. .....the US and Europe had made it mandatory to use synthetic and jute geo-textile in road construction. But, India is yet to take off. Use of both synthetic and jute geo-textile enhances the life of a road and makes it water resistant. Jute geo-textile has been
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used in making only 47.5 km roads in five states, namely West Bengal, Assam, Madhya Pradesh, Jharkhand and Orissa, under the Pradhan Mantri Gram Sarak Yojana. Synthetic geo-textile has been used in constructing only a stretch of the national highways…… …………. Source: Financial Express, Kolkata
7) ACCRA, TUESDAY, JULY 10, 2007: To reduce Ghana's

dependency on foreign players for jute sacks, two Indian companies have agreed to set up jute mill factories in Kumasi city here by September, an official said."Two Indian companies have expressed their interest to our officials during a recent visit to India, where they were taken through the processing and procedures for producing the jute sacks," said Isaac Osei, Chief Executive of the Ghana Cocoa Board. He said this would enable Cocobod to reduce substantially the import of jute sacks for bagging cocoa for exports. The two companies were named as Al-Chandani and Gandhi Jute Limited. Their proposals would be assessed by the month-end. Currently the country imports jute sacks for the cocoa industry. "Research has shown that areas for such as jute Ashanti in Mampong, Techiman hen and said. is in Nkoranza in the middle zone of the country were fertile growing large 2007: of quantities," Dubai Source: The Economic Times 8) UAE: January the 29, use Municipality jute bags encouraging eco-friendly

supermarkets which will be distributed to the malls.
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They prefer jute bags instead of the plastics. UAE currently consumes about 150,000 tons of plastic in the form of bags and other items annually.

Changes contracts:

in

the

terms

and

conditions

of

1) Domestic spot market:
a) The spot prices are disseminated in different regional

markets. The major\ jute market in West Bengal is the terminal market at Kolkata. Jute exchange markets in India are: • The East India Jute & Hessian Exchange Ltd • National Multi Commodity Exchange of India Limited. • National Commodity & Derivatives Exchange Ltd. • Multi Commodity Exchange (MCX) b) Spot prices dissemination on NCDEX The exchange disseminates the spot prices prevalent for Jute at Kolkata three times a day to its trader workstation, its website and to various data vendors like Telerate. Through a process known as polling, the exchange randomly calls up 25 Market participants from a panel of 40 marke participants and asks them for the Spot prices thrice a day. After collecting the raw prices, the exchange carries out a process called bootstrapping, a scientific procedure for removing the outliers of raw prices (i.e. prices that too far away) and averaging the remaining prices.
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NCDEX has outsourced the spot price polling to CMIE (Center for Monitoring of Indian Economy). The exchange also invites Spot market spot price polling process. players for participating in the

1) Domestic Forward and Futures market:
a) Futures trading in Raw Jute and Jute Goods began in

Calcutta with the establishment of the Calcutta Hessian Exchange Ltd., in 1919. Later East Indian Jute Association Ltd.,was set up in 1927 for organizing futures trading in Raw Jute. These two associations amalgamated in 1945 to form the present East India Jute & Hessian Ltd., to conduct organized trading in both Raw Jute and Jute goods. b) KRISHNAGAR, September, 30, 2007: Low-grade quality of production and the recent trouble in future trade in jute have thrown thousands of jute growers in Nadia into a debt-trap. Early this month, Multi Commodity Exchange (MCX) started jute contracts and instead of fixing jute prices only on the basis of spot prices in Kolkata where mill owners dictate prices, MCX factored in prices from production centres where prices were higher. The production centres include Nadia, Murshidabad and North and South 24-Parganas. But, mill owners who had earlier managed to get the raw jute at low rates have started crying foul and are now

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lobbying the state government and the Centre to ban the future contract…………………….Source: The Statesman
c) Kolkata, September 15, 2007:

East India Jute & Hessian

Exchange Ltd (EIJHE) in a bid to survive is looking forward to become a clearing member of the Multi Commodity Exchange (MCX). …..EIJHE has to stop jute futures as there is no more volumes with it. MCX has become the fourth commodity exchange to try out with the raw jute futures, and is currently handling almost the entire volume. All the other exchanges that have tried out forward and futures trading in jute including EIJHE, the National Commodity & Derivative Exchange (NCDEX) and the National Multi-commodity Exchange (NMCE) have failed. MCX vice president Arindam Saha said currently the platform is trading raw jute worth Rs 20 crore every day. If EIJHE joins as a clearing member, the impact cost of trading for its members would be very low. Meanwhile, the Indian Jute Manufacturers Association (IJMA) has urged the Union textile ministry to prevent MCX from jute futures. Saha said there are only a few jute mills under the IJMA and the government is not likely to give much attention to its demand. Source: Financial Express, Kolkata
d) Kolkata, August 28, 2007: Early this month, MCX started

jute contracts and instead of polling jute prices only on the basis of spot prices in Kolkata where mill owners dictate prices, MCX factored in prices from production centers
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where prices were higher including the districts of Murshidabad, Nadia and 24 Parganas. Soon, the buyers market turned into a sellers market fetching the farmers much higher prices for their raw jute. But mill owners who had earlier managed to get the raw jute at low rates started crying foul and are now lobbying the state government and the Centre to ban the futures contracts. There are some 100 odd jute mills in and around Kolkata but only a handful of mill owners control prices. MCX sources say they are asking for a ban because they are not being able to dictate the market now. Last year, West Bengal produced nearly 110 lakh bales of jute, around 85 per cent of the country's jute production. But analysts say that this year heavy rain may also lead to lower production and higher prices. It may come as a surprise that the CPM, which had virtually forced the government to ban future trading in agri-commodities, unofficially says that jute contracts are actually helping the farmers. Source - Sourav Sanyal
e) KOLKATA: Following the launch of jute Futures trading

at Multi-Commodity Exchange (MCX), the industry is witnessing a strange phenomenon of Jute Corporation of India (JCI) procuring the crop from farmers at a much higher price. This move by the JCI has invited the flak of jute industry players. JCI is now discreetly procuring the crop at prices over Rs 50-Rs 100 per quintal above the market rates.
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The industry has asked the Ministry of Textiles (MoT) to stop the practice immediately. The industry says the practice will encourage ‘fatka’ and ‘dabba’ trade. JCI is already languishing with huge unsold raw jute stocks of around 4.5 lakh quintals accumulated since 2006-07. The industry has urged the ministry to probe into the matter. JCI officials, however, said, JCI was created in the early 70s to help farmers. The recent procurement process might be discreet and internal, but the JCI is precisely doing its job. An industry representative said JCI’s operations aren’t transparent and would help manipulators. The technique adopted by JCI to discreetly instruct its direct purchase centres (DPCs) to procure the crop at prices higher than the market rates might have been prompted by the recent movement at the MCX over Futures trading where there has already been an artificial hike in prices of jute. This, the industry feels, would result in creating a volatile market as it prevaileding 2005-06. The price of Tossa Desi (TD)-5, the most sought-after variety of the crop, is currently ruling at JBA rates of Rs 1,730 /quintal at the Kolkata landed prices, Rs 1,780/quintal for TD-4 grades and Rs 1,680/quintal for the TD-6 specie. JCI in the north and south Bengal markets are flatly purchasing the crop at prices which are Rs 50-Rs 100/quintal higher than the going rates. The current minimum support price (MSP) for the crop fixed by the government is around Rs 1,050 per quintal for the TD5 grades and a subsequent Rs 50/quintal higher for the
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TD-4 and lower for the TD-6 grades. JCI has also been accused of selling its commercially purchased northern and semi-northern raw jute ‘covertly’ to selected mill managements without going in for an open declaration, as is the practice. The matter is currently being probed into by the MoT. Source: Commodity Online
f)

KOLKATA, July 30, 2007: Raw jute trading will go live on the MCX platform from July 31. With this, it will be the second West Bengal -based commodity to go live on the exchange after potato. With the new session beginning in August-September, the MCX jute futures contract is expected to help the industry to lock in a raw jute price for hedging. Hedging is like an insurance product, because once a commodity is sold on an exchange platform, its price get locked. As a result, volatility in the market dos not affects a buyer or a seller. With close to 75 mills in the eastern region, the Rs. 3,000 crore jute industry is looking for another opportunity to trade in forward, said Arindam Saha, regional head of MCX (east and north east).

2)International commodity futures and exchanges:
a) Jute

trade is currently centered around the Indian Bangladesh is the largest exporter of raw
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subcontinent.

jute, and India is the largest producer as well as largest consumer of jute products in the world. Therefore, the local price of raw Jute in Bangladesh is the international price. The golden fibre trade centre Limited (GFTCL) is the leading exporter and supplier of raw jute, kenaf, & roselle hemp (mesta) fibres and traditional jute goods & diversified jute products from Bangladesh. Again, the local price of Jute Goods in India is the international price.
b) August 19, 2007 Workers in Bangladesh have asked the

government to totally ban raw jute exports to India and Pakistan saying the two importers have gained commercial advantage. Four trade union leaders Saturday demanded the ban in a joint statement, saying Bangladesh should export only valued added jute items, providing 15,000 to 20,000 more jobs………….. Source: News Post India

Price data:
Markets 1 International(US$/To n) International(Rs./qui 2 ntal) India avg.(Rs./quintal) 2007 328.00 1291.3 3 1090.3 13 Years 2006 384.88 1515.2 7 1240.4 05

2005 381.44 1501.7 2 1090.2 07

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Graphical Representations:

Average annual prices of Jute
1600 1400 Prices (Rs./quintal) 1200 1000 800 600 400 200 0 International(Rs./quintal) India average(Rs./quintal) Year 2007 Year 2006 Year 2005

Trade associations/ Commodity associations/ Commodity agreements
1) Kolkata, January 01, 2008: Trading in the Kolkata gunny

market showed divergent trends this week. Backed by almost regular departmental buying against rabi foodgrain packaging requirements by the Union government, manufacturing mills could to some extent hold back selling in the open market. On industry’s labour front all was not normal as chances of trade union demand for linking DA to rise in cost of index might again come up and consequent
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lockout in some mills could hardly be averted. Standard B.T will price was quoted at the previous level of Rs 27,000 per tonne as genuine buyers were scarce and mills normally refused to sell below that level as prices reached their bottom line, according to them. But Hessian went down further to finish at lower levels by losing Rs 1,500 over the previous weekend level to Rs 34,000 per tonne on sustained selling pressure. The volume of transactions was limited and closing undertone mixed. The Union government bought a fresh lot of about a fresh lot of about 27,000 bales or so for meeting rabi packaging requirement of states after a fortnight or so. Around mid-December, the authorities lifted 2.17 lakh bales for Punjab and Haryana against delivery this month but drastically reduced to 27,000 bales (Haryana- 10,000 bales and Rajasthan-17,000 bales) only for some unknown reason. The entire departmental order was linked to the JCI jute in order to liquidate its old jute stocks to the extent of 20%. Demand from industrial users and commodity traders were few and far between. However, the domestic sugar industry just emerged in a small way to pick up their jute packaging requirements for sugar production. On the other hand, commodity traders preferred to go slow in buying their packaging materials due to low arrivals of various commodities and rising prices. Export business and enquiries were essentially poor as majority of overseas buyers kept their commitments light, waiting for an opportune moment. The fresh bouts of likely labour unrest
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in mills also acted as a restraint for foreign buyers from long term purchases. Major buyers like the US, the UK and some East European countries inquired for some selective items like special type of Hessian and fine yarn. The raw jute market also remained essentially quiet due to inadequate demand. The Economic Times

Major Jute goods Importers in 2006-07

Saudi Arabia, Germany, 4% UAE, 3% 4% USA, 16% UK, 5% Belgium, 6%

Ghana, 11% Syria, 9%

Egypt, 7% Turkey, 9%

Germany Saudi Arabia UK Belgium Egypt Turkey Syria Ghana USA UAE

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Jute goods types in the market

Others, 6% Yarn&Twine, 12%

Hessian, 19% Sacking, 63%

Rapeseed
Producing Countries : 1) China (11-12 million tons) 2) European Union (10-13 million tons) 3) Canada (6-7 million tons) 4) Germany (5.3 million metric tons)
5) France (4.1 million India (4-7 million tons) 6) metric tons)

7) United Kingdom (1.9 million metric tons) 8) Poland (1.6 million metric tons) 9) Australia (0.5 million metric tons) Production (Million tons)

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Countries 1 2 3 4 5 China Canada India European Union Other 2007 12.20 8.49 6.80 15.47 4.20

Years 2006 13.05 9.66 6.20 15.48 4.08

2005 13.18 7.73 6.50 15.33 3.35

Graphical fluctuations
Rape Seed Production
Production (million tons) 20 15 10 5 0 India China Canada European Union Other Year 2007 Year 2006 Year 2005

Countries

Supplying/Exporting countries 1) Canada (2.5-3.5 million tons) 2) Australia (1.5 million tons)

Importing Countries 1) Japan (2 million tons) 2) Mexico (1 million tons) 3) United States

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Changes in the International/Regional Commodity agreement terms:
1) In December 2004, Winnipeg Commodity Exchange

converted from the traditional "open outcry" method of trading to an electronic trading format. This made it the first commodity futures exchange in North America to go fully electronic. Until December 2007, futures were traded on the platform of the Chicago Board of Trade. Since September 2007, the WCE has been a subsidiary of the Atlanta-based Intercontinental Exchange (ICE). Its quotes are now traded on the ICE platform. Changes in the terms and conditions of contracts: 1) Domestic spot market: a) Mustard spot markets in India are:
• • • •

Hapur Alwar Bikaner Jaipur

Peak arrival period for the commodity in these markets is March-May. Major portion of the commodity enters the regulated mandies and is purchased by oilseed crushers. Rapeseed Exchanges centers in India are: • Vijay Beopar Chamber Ltd., Muzaffarnagar • Rajdhani Oils and Oilseeds Exchange Ltd. Delhi • National Board of Trade. Indore.
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• The Chamber Of Commerce.,Hapur • The Central India Commercial Exchange Ltd, Gwaliar • Bikaner Commodity Exchange Ltd.,Bikaner • National Multi Commodity Exchange of India Limited. • Multi Commodity Exchange of India Ltd. • National Commodity & Derivatives Exchange Ltd. • Haryana Commodities Ltd., Hissar 2) Domestic Forward and Futures market: 3) International commodity futures and exchanges: Price data: Markets 1 International(US$/Ton) International(Rs./quintal ) India average(Rs./quintal) 1848.72 1654.33 1810.48 2007 427.33 1690.09 Years 2006 313.25 1238.90 2005 260.08 1028.61

2

20

Graphical Representations:

Average annual Prices of Rape seed
2000 1800 Prices (Rs./quintal) 1600 1400 1200 1000 800 600 400 200 0 International(Rs./quintal) India average(Rs./quintal) Year 2007 Year 2006 Year 2005

Trade associations/ Commodity associations/ Commodity agreements

1) Winnipeg Commodity Exchange at Canada trades in canola (hybrid mustard) futures. It is the main pricediscovery mechanism for worldwide canola trade. 2) Rapeseed is traded on the Euronext exchange. Euronext merged with NYSE Group to form NYSE Euronext, the first global stock exchange.

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Relation between Spot/ Futures/ Warehousing/ Warehouse financing

Other interesting developments
1) Rapeseed/Canola prices are forecasted to rise because of

rise in United States (US) soybean prices and European Union (EU) demand for bio-fuels. 2) India exports around 4 lakh tons of Rapeseed meal. 3) 80% of the Canola crops planted in Alberta, Manitoba, and Saskatchewan are GM (genetically modified food) herbicidetolerant varieties.

Cotton
Producing Countries and Production (Millions of metric tons) Countries 2007 1 2 3 4 5 6 7 China India United States Pakistan Brazil Uzbekistan African Franc 7.7 5.2 4.1 1.9 1.5 1.2 0.6 Years 2006 7.7 4.7 4.7 2.2 1.5 1.2 0.8 2005 6.4 4.1 5.2 2.2 1.0 1.2 0.9
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Zone 8 9 10 11 12 13 14 15 16 Turkey EU--25 Syria Egypt Turkmenistan Australia Kazakhstan Tajikistan Others 0.7 0.3 0.3 0.2 0.3 0.1 0.3 0.1 1.3 0.8 0.4 0.2 0.2 0.3 0.3 0.1 0.1 1.3 0.8 0.5 0.3 0.2 0.2 0.6 0.1 0.1 1.5

Graphical fluctuations
Cotton Production
Production (millions of metric tons) 9 8 7 6 5 4 3 2 1 0
hi na ni te Ind d i St a at P a es kis ta n Af U Bra ric zb an e zil Fr kist a n an c Zo Tu ne rk EU ey --2 5 Sy ria Tu Eg rk m yp en t i Au stan Ka str za alia kh Ta sta jik n ist a O n th er s C

Year 2007 Year 2006 Year 2005

U

Supplying/Exporting countries 1) United states
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2) Sub-Saharan Africa (14 countries comprise the “Franc

Zone”) 3) Uzbekistan 4) Australia 5) India

Importing Countries

1) China 2) Turkey 3) Indonesia 4) Thailand 5) Bangladesh 6) Pakistan
24

7) Mexico 8) Russia 9) Korea

Changes in the International/Regional Commodity agreement terms: Changes in the terms and conditions of contracts: 1) Domestic spot market: 2) Domestic Forward and Futures market: 3) International commodity futures and exchanges: Price data: Markets International(cents/lb) International(Rs./quin 2 tal) India average (Rs./quintal) 2007 59.50 5187.9 7 2546.4 5 Years 2006 57.68 5029.2 8 2129.6 6 2005 55.33 4824.3 8 1876.8 3
25

Graphical Representations:
Average annual Prices of cotton
6000 5000 Prices in Rs./quintal 4000 Year 2007 3000 2000 1000 0 International(Rs./quintal) India average (Rs./quintal) Year 2006 Year 2006

Trade associations/ Commodity associations/ Commodity agreements Relation between Spot/ Futures/ Warehousing/ Warehouse financing Other interesting developments References: 1) http://www.mcxindia.com/ 2) http://www.fas.usda.gov/gainfiles/200706/146291482.pd f 3) http://www.agr.gc.ca/maddam/index_e.php?s1=pubs&s2=bi&s3=php&page=bulletin_ 19_17_2006-11-30 4) http://www.fao.org/es/esc/prices 5) http://dacnet.nic.in/dmi/agmarkweb/SA_Pri_Month.aspx 6) http://www.x-rates.com/calculator.html
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7) http://www.worldjute.com/ 8) http://www.indiainbusiness.nic.in/economy/agriculture.ht m 9) http://www.fao.org/es/esc/common/ecg/323/en/SBJUN E07.pdf 10)http://www.cottoninc.com/MarketInformation/MonthlyEc onomicLetter/ 11)http://www.ers.usda.gov/Briefing/Cotton/trade.htm
12) www.ncdex.com/Knowledge/PDFs/Jute_Page.pdf

13)http://fmc.gov.in/htmldocs/Evolution.html 14)http://finance.indiamart.com/markets/commodity/mustar d.html

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