The Textiles Ministry has issued an order restricting the stock of jute to two months of the mills’ capacity to prevent hoarding and control prices of the commodity.
Raw jute stockists would not be allowed to hold over 1,700 quintals as stocks, according to an order by the Jute Commissioner. The order came after a meeting of mill owners of the Indian Jute Mills Association, the apex industry body, was convened by the federal government. It was preceded by threats of seizures issued by the Commissioner.
The sector is in the grip of a crisis triggered by fears of a 15 lakh-bale crop shortfall during the season. The rumours of the shortfall led to hoarding by some mills and traders, pushing up the prices. The crisis has already begun to impact the industry which still depends on gunny bags as its main product profile. The raw jute problem has already led to the dilution of the government’s plan for procurement of jute bags for packing foodgrains during the ensuing rabi season.
The problem is as acute in Bangladesh which recently banned exports of the fibre.
In case mills have already accumulated stocks in excess of the stipulated requirement then they should suspend fresh purchase of raw jute, either directly or through their agents till stocks get reduced to the stipulated level, according to the order.
Sanjay Kajaria , former chairman IJMA said that in the present situation the limit should have been pegged at round 21 days and traders should have been allowed to hold no more than 1,500 quintals. There was also need to fix a ceiling for raw jute in order to check hoarding, he said.
