The Hindu Business Line : Crop fears boost raw jute prices

Kolkata, Aug. 13 Raw jute prices are on the rise. This follows fears that the crop yield during the 2007-08 jute year (July-June) will be lower than 90 lakh bales (of 180 kg) as expected earlier. Fears of a lower-than-expected crop yield have been attributed to heavy monsoon rains and floods in northern Bihar and northern, semi-northern and lower Assam.

The rise in raw jute prices has also been attributed to steady demand from jute mill sector, whose order book position for gunny bags and other products is quite good.

At the beginning of the current jute season, the benchmark TD4 grade of raw jute was quoted at Rs 1,140 per quintal at the Jute Balers’ Association (JBA). It moved up to Rs 1,155 on July 31. The new crop, of which a negligible amount has arrived in the market, was quoted at Rs 1,170 a quintal a few days ago. On Monday, the TD4 grade of raw jute was quoted at JBA at Rs 1,240 a quintal.

According to informed sources in the raw jute trade, the current jute year took off with a carry forward stock of 24 lakh bales. Of this, nine lakh bales of raw jute were lying in the godowns of the mills, 3.5 lakh bales was held by Jute Corporation of India while the balance 11.5 lakh bales were in different upcountry markets.

From the beginning of July till date, a very little quantity of the new crop has arrived in the market for mills’ consumption. From July till date, about 11 lakh bales of raw jute have been consumed by jute mills.

Upcountry sources informed that farmers have started harvesting the plants that are on low land despite their length being shorter than what it would have been if the plants were harvested when fully mature. Consequently, the fibre is of shorter length, and this is not to the liking of the mills.

With heavy rains in jute growing areas hampering the arrival of the new crop in the market and mills active in procuring raw jute – consequent upon an order for B Twill bags issued by the Union Government recently – prices of raw jute are on the upswing.