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Notwithstanding higher production, jute prices rule firm

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The 55 per cent leap in generation notwithstanding, uncooked jute rates are ruling business thanks to reduce availability as farmers are holding on to their stock in anticipation of greater selling prices. The reduced carryover stock from last year is also pushing up costs.

Prices of uncooked jute in West Bengal is hovering around ₹7,000-7,200 a quintal, as against the common typical of about ₹4,500-4,750 a quintal throughout the starting of the crop season.

Uncooked jute generation in the Point out is believed to be shut to 85-90 lakh bales in 2021-22, as against 55-58 lakh bales in 2020-21. The bigger production is on the back again of favourable weather circumstances and increase in sowing spot thanks to the remarkably remunerative prices the golden fibre fetched last calendar year.

In accordance to Raghav Gupta, Chairman, Indian Jute Mills’ Affiliation (IJMA), uncooked jute rates have been remarkably risky final yr because of to the decreased crop. Charges had touched as superior as ₹9,000 a quintal towards the conclude of the final crop period (that is in June this calendar year). Even so, when the new crop started out arriving, charges started to fall and touched around ₹5,500 a quintal.

“Farmers were reluctant to sell at these price ranges and so have been keeping on to the generate. This pushed up selling prices,” Gupta explained to BusinessLine.

Better jute acreage

Jute cultivation in the place is generally concentrated in a few states like West Bengal, Bihar and Assam. Bengal accounts for practically 80 per cent of jute acreage and 83 for each cent of output, adopted by Assam with a generation share of all around 8 for every cent and then Bihar.

The sowing acreage in West Bengal, which experienced dropped to 6.5 lakh hectare in 2020-21, is approximated to have amplified to about 7.5 lakh hectare all through this time.

It is to be observed that inadequate weather ailments and the migration of jute farmers to other crops this sort of as maize dragged down uncooked jute output to 55 lakh bales in 2020-21, as versus an common manufacturing of around 65-70 lakh bales.

Although the cyclone Amphan in May 2020 and the subsequent rains destroyed the crop in Bengal. Critical rain in 21 districts of Assam in July-August previous yr experienced also impacted production of raw jute in the northeastern area.

In contrast to this, jute generation this 12 months has been greater owing to favourable temperature circumstances and improved cultivation, business insiders stated.

Charges have been envisioned to stabilise close to ₹5,500 a quintal on the back of a larger output this yr. However, that did not take place as farmers have been keeping on to their inventory.

It is to be pointed out that the Fee for Agricultural Prices & Prices (CACP) in its “Price Coverage for Jute: 2021-22 season” has encouraged a MSP of raw jute (TDN3, equivalent of TD5) for the season 2021-22 to be preset at ₹4,500 a quintal. This is an maximize of 6.5 for every cent about MSP of ₹4,225 a quintal for the previous year.

Selling price ceiling

The jute regulator Jute Commissioner’s office environment has imposed a price ceiling of ₹6,500 a quintal on uncooked jute trade in get to be certain supply of raw content to the mills at a good cost.

The Indian Jute Mills Association (IJMA), which feels that the value ceiling is probably to be counterproductive for jute cultivation, has sought the intervention of West Bengal Main Minister Mamata Banerjee to consider up the matter with the Centre to evaluate its final decision.

“The jute farmer will be dis-incentivised to cultivate raw jute future yr with these laws in put. The West Bengal jute farmers will be worse off than their counterparts in Bangladesh. Indirectly this will result in growth of the Bangladesh sector at the cost of India,” IJMA claimed in the letter to the Chief Minister.