The Hindu Business Line : Jute crop may be lower this year

According to sources in the Jute Balers' Association, the ensuing jute year (July-June) will begin with a carry forward stock of around 27-28 lakh bales, including raw jute lying in mills' godowns, with Jute Corporation of India (JCI) and upcountry markets. This will ensure that, despite lower crop volumes that are expected in the 2007-08 jute year as indicated by lesser offtake of seeds by farmers, mills' requirements would be met in the forthcoming jute year.

Strike call

It may be mentioned that the 63-day, industry-wide jute mills strike in West Bengal that ended earlier in March this year resulted in lower consumption by jute mills during the current jute year to the extent of 16 lakh bales.

Consumption

Generally speaking, raw jute consumption by the mill sector during a normal working year stands 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 for the 12-month period July-June is pegged at around 102 lakh bales, on an average.

Growing areas

The sources said sowing has already commenced in jute-growing areas.

In Assam and North Bengal, sowing is almost over even as it continuous in semi-northern and South Bengal and Bihar.

The Union Government has already declared the minimum support price (MSP) at Rs 1,055 per quintal for TD 5 Grade jute ex-Assam.

This is higher by Rs 55 from the MSP levels declared last year.

As in earlier years, JCI has been appointed the nodal agency for undertaking price support operations and losses, if any, suffered by it, will be reimbursed by the Union Government.

Sources in the raw jute trade said that, in view of the "fair MSP" that has been announced, market intervention by JCI was expected in South Bengal by end-August or early-September 2007.