The Hindu Business Line : Raw jute prices decline on Bengal mills strike

Grim scenario
The price of the standard TD 4 grade of raw jute has declined to Rs 1,380 a quintal to Rs 1,235.
The raw jute carryforward stock from 2005-06 stood at seven lakh bales as on July 2006.

Kolkata March 16 The 63-day industry-wide jute mills strike in West Bengal has taken its toll on raw jute prices. The price of the standard TD 4 grade of raw jute has come down from Rs 1,380 a quintal on January 4 — a day before commencement of the strike — to Rs 1,235 on March 15.

Lower consumption

According to informed sources, the prolonged strike has resulted in lower consumption by jute mills during the 2006-07 jute year (July-June) to the extent of 16 lakh bales (of 180 kg). Raw jute consumption by the mill sector during a normal working year is at about eight lakh bales per month aggregating to 96 lakh bales for the full year. And to this can be added a consumption of six lakh bales by the cottage industries sector and the armed forces. Thus, the total raw jute consumption is pegged at around 102 lakh bales on an average.

Availability

The raw jute carryforward stock from 2005-06 stood at seven lakh bales as on July 2006, the beginning of the 2006-07 jute year. Production during the year stood at 102 lakh bales while five lakh bales were imported from Bangladesh, thereby taking the total raw jute available in the current jute year to 114 lakh bales. With the total raw jute consumption in the current year expected to be around 86 lakh bales — 80 lakh bales by the mill sector and six lakh bales by cottage industries and armed forces — the total carry forward for the next year has been pegged at 28 lakh bales.

In the Kolkata market, the standard TD 4 grade of raw jute was sold at an average price of Rs 1,546 and Rs 1,570 per quintal in September 2006 and October 2006, respectively. In November 2006, the average price of the TD 4 grade was Rs 1,558 per quintal while in December 2006 it went down to Rs 1,497 per quintal.

When jute mills reopened on March 9, following a tripartite settlement the previous evening, the TD 4 grade of raw jute changed hands at Rs 1,280 per quintal. On March 15, it was quoted at Rs 1,235 per quintal at the Jute Balers' Association here.

Surplus

According to Mr Phanibhusan Banerjee, Secretary of Jute Balers' Association, the falling prices of raw jute was owing to the surplus generated by non-consumption by mills for over two months. "With no consumption for over 60 days, a surplus of about 16 lakh bales has been created in the market. This has given the industry an opportunity to purchase raw jute at reduced prices," he said.

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