Farmers struggle with falling jute prices

Jute farmers across the country are facing staggering losses, thanks to a drastic fall in raw jute prices at the growers' level.      

The concerning situation comes amid a reluctance on the part of jute millers to purchase the golden fibre, further exacerbating the crisis for farmers who have reported good harvests but poor financial returns.

The price of raw jute has fallen significantly, plunging from Tk 3,300-3,800 per maund (approximately 37 kilogrammes) last year to a current Tk 1,500-2,200 per maund, according to local sources.

The sharp decrease in prices has meant that farmers are unable to recover their production costs, leading to widespread despair in the agricultural sector.

Abdul Barik Khan, Secretary-General of the Bangladesh Jute Mills Association (BJMA), attributes the declining interest in buying raw jute to several factors, notably a financial crunch.

"Indian companies have stopped buying our raw jute, which has adversely impacted the local market," Khan explained.

He also pointed to the discontinuation of cash incentives from export earnings for the past five months and an additional 2 percent tax at source on raw jute purchases as contributing factors to the millers' financial woes.

Data from Bangladesh Bank show that the export of jute and jute goods has decreased by 19 percent in FY 2022-23 compared to FY 2021-22. This decline in export demand has had a domino effect on local jute prices.

The production cost of jute has soared this year due to weather conditions such as prolonged drought and untimely rains. Khalil Akhan, a jute farmer from Zajira Upazila in Shariatpur, lamented that reduced rainfall has necessitated additional expenses for rotting jute, further escalating the cost of cultivation.

A large quantity of raw jute has appeared in local markets, but buyers are few and far between. Tofazzel Hossain, a farmer from Kumarkhali in Kushtia, has yet to sell his produce due to the discouraging prices, despite incurring a cost of Tk 15,000 for producing 8 mounds of raw jute per bigha of land.

According to Tajul Islam Patwary, Director Field Service Wing of the Department of Agriculture Extension (DAE), farmers have cultivated jute on 7.45 lakh hectares of land this year against a targeted 7.64 lakh hectares.

Although 73 percent of the jute harvest has been completed as of August 13, farmers are yet to see financial gain from their labour and investment.

Despite the adverse circumstances, jute cultivation and production have risen over recent years. However, the absence of fair export opportunities has prevented farmers from realising fair prices for their produce, said market insiders.

Shafiullah Ripon, a jute exporter, mentioned that the international demand for raw jute has waned, triggering the plummet in domestic jute prices.

Farmers in districts like Faridpur, Shariatpur, Pabna, Jessore, Magura, Kushtia, and Manikganj have reported satisfactory yields despite erratic weather conditions but are struggling to make a profit.

The production of jute was 84.59 lakh tonnes from 7.30 lakh hectares of land in FY 2022-23 while this year, the target of production is 89.87 lakh tonnes from 7.64 lakh hectares of land, according to DAE.