There is a decrease in demand for jute owing to the Government of India, for the first time, diluting the packaging norms by 60 percent under the mandatory Jute Packaging Materials Act ) of 1987.
Under the JPMA, sugar mills in the country were mandated to use only jute bags for packing sugar. But, in view of availability of cheaper packaging alternatives, especially from the plastics industry, and also due to the jute mills often failing to supply bags to sugar mills on time, the act has been relaxed by the Government. As a result, jute mills in India are not getting orders from sugar mills and the demand for jute has dropped.
According to the Indian Jute Mills’ Association, India’s raw jute production in 2012-13 season is likely to be around 9.2 million bales, which is lower than last season’s jute output of 9.9 million bales.
At present, the carry over stock in jute mills is estimated to be around 4 million bales and when the likely output is added, it would take the total supply to 13.9 million bales, which would be enough to meet the whole year’s demand, according to the association.
Hence, the raw jute (TD5 variety) prices are likely to remain stable during the current season. Meanwhile, the Government had increased the Minimum Support Price (MSP) of raw jute for TD5 variety to Rs. 2,200 per quintal for the 2012-13 season, up 31.34 percent from last season’s price of Rs. 1,675 per quintal.
