The Hindu Business Line : Jute crop size likely to be 10% lower

Consumption
In any average year, jute mills consume around 90 lakh bales while other sectors that use raw jute - such as cottage industries, defence, households, etc - consume around 9-10 lakh bales.

Kolkata June 11 With the acreage under raw jute cultivation declining this year, the crop for the ensuing jute year July 2007-June 2008 is expected to be 10 per cent lower than the normal yield of around 100 lakh bales.

According to informed upcountry sources, the reduced acreage under jute will not result in lower crop output to the extent as apprehended earlier.

This is because the condition of the plants was "sound and good" and the yield per hectare is expected to be more than the normal level.

Stocks position

The sources said that, despite the lower crop in 2007-08, the mills sector would not face any shortage of raw jute thanks to the carry forward stock of around 25-26 lakh bales, which has resulted largely on account of the 63-day industry-wide strike that was held earlier this year.

Consumption

In fact, with next year's crop estimated to be in the region of 90 lakh bales, and with a carry forward stock of 25-26 lakh bales, there would be a surplus of raw jute in the market.

In any average year, jute mills consume around 90 lakh bales while other sectors that use raw jute - such as cottage industries, defence, households, etc - consume around 9-10 lakh bales.

The sources said that reports from upcountry jute growing areas in several states indicated that the new crop of Assam and North Bengal would arrive in the market by mid-July.

Prices

Given the way raw jute prices are headed, it would be reasonable to assume that market support operations would have to be undertaken by Jute Corporation of India (JCI).

Already, last month, JCI had to embark upon market support operations when prices of raw jute fell below the minimum support prices (MSP). According to prices quoted by Jute Balers Association, the price of the benchmark TD4 grade of raw jute in the Kolkata market had fallen to Rs 1,190 on May 15,2007.

The MSP of the South Bengal jute in the districts has been pegged at Rs 1,133 per quintal. In Kolkata today, the TD4 grade of raw jute was quoted at Rs 1,135 per quintal.