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KOLKATA, Nov. 29

UNCERTAINTY looms large over the jute industry, as the procuring agencies of jute sackings have delayed placing of orders despite being assured a huge indent in the middle of November this year.

Addressing a press conference, Mr G.M. Singhvi, Chairman of Indian Jute Mills Association (IJMA), said an atmosphere of uncertainty was currently ruling the jute industry. Huge inventories are being created owing to unsold stocks and the mills are suffering from a financial crisis leading to default in payment of wages and also to raw jute suppliers.

It may be noted that on November 12, the central procuring agencies assured purchase of 8.22 lakh bales of jute bags for the rabi crops. Based on that assumption, the jute mills continued with their production but till date not a single order has been placed.

Mr Singhvi along with other past chairmen, like Mr R.K. Poddar and Mr Arun Lohia, feels that the plastics lobby may be behind the "delaying of orders." They apprehend that orders will be placed at short notice, forcing the mills to slip up on timely deliveries. And in the process, the industry will be conveniently blamed for not being in a position to meet the demand.

"This is an unprecedented crisis. We apprehend this is a concerted effort on the part of the plastics lobby to discredit the jute industry," Mr Singhvi said.

At present, the total inventory of jute sackings, which comprises 70 per cent of the average industry production, is to the tune of two lakh bales. Mr Singhvi clarified that the proposed procurement of 8.22 lakh bales for the rabi crop is one of the highest in recent years.

Of this, Punjab was supposed to buy three lakh bales, Haryana 2.12 lakh bales, Food Corporation of India 1.70 lakh bales, and Uttar Pradesh and Uttaranchal together 1.40 lakh bales. Last year, the procurement of jute sackings for the rabi crop was 6.82 lakh bales.

Meanwhile, Mr Singhvi and others said that raw jute prices have also fallen below the minimum support price. In the current year, raw jute production is also one of the highest, at over 110 lakh bales.

"The minimum support price for the TD-5 variety produced in Assam is Rs 850 per quintal. The same quality is available in Kolkata at around the same price. Hence, the farmers have sold it at around Rs 650 per quintal, an unremunerative price. The farmers are affected in the same way as the industrial workers," Mr Singhvi explained.

Meanwhile, the dilution of the mandatory orders is already being implemented. At present, the foodgrains industry is supposed to pack 80 per cent and sugar industry 75 per cent of their production in jute bags.

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