Call it their guile or native intelligence, jute growers in West Bengal, where the country’s jute mills are largely concentrated, are still biding their time to cash in on all that they had harvested by October 2009. In their dogged refusal to let go off the jute still with them, ignoring the mills complaining of shortages and high prices of the raw material, they have village level professionals as company.
Empowered by market intelligence and largely free from the vice like grip of moneylenders, a development during the Left Front rule, today’s savvy Bengali farmers are not desperate to rush to the mandis as they harvest jute crop between July and October. They will choose parcel sizes of jute to be sold at different points of the marketing season depending on their price expectations.
Wresting some initiative from the traditional traders and moneylenders, village level teachers, lawyers and grocers would buy some jute exercising their future price discovery judgement during the peak arrival period of the jute crop ahead of the Durga Puja, keep that in storehouses in their backyards and then sell the material at handsome premiums at opportune points. This explains as to why at the beginning of the 61-day strike in jute mills on December 14, only about 60 per cent of this season’s crop was received by mills. The balance was held by traders and also farmers and village-based professionals.
The benchmark grade of raw jute was commanding a price of Rs 2,600 a quintal as the strike began. To the surprise of mill owners and market observers, neither ahead of the strike nor as long as it lasted, those holding jute stocks were not in a hurry to sell. It was a good commercial decision as by the time the strike ended on February 14 and afterwards, jute was in demand at Rs 3,400 a quintal. Now though price has eased to Rs 3,200 a quintal.
In a submission to West Bengal Chief Minister Buddhadeb Bhattacharya, Indian Jute Mills Association (IJMA) Chairman Manish Poddar urged government intervention to “flush out” jute in hoardings by some traders at mokams. While this needs to be done urgently on the basis of list of godowns identified by IJMA, there too were murmurs of protests within the industry of a few cash-rich mills indulging in overbuying and stocking of jute in the belief that the strike would not happen.
According to trade officials, the sustained firmness in the fibre market is mainly because the Indian crop fell short of the initial target of 10.5 million bales of 180 kg each by at least 1 million bales. The market further gained in pace with Bangladesh putting a ban on jute exports in December finding that the country had harvested a poor crop and mills there agitating that the fibre should be kept for local consumption.
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Bangladesh has withdrawn the export ban since. But its industries minister says, “Raw jute exports are yet to resume. We will take a call on exports based on a firm assessment of this season’s crop.” A bad crop in Bangladesh like here apart, the mills across the border being always overtly aggressive in jute goods exports, they wanted to take full advantage of the forced closure of the industry here. Out of India’s annual production of 1.5-1.7 million tonnes of jute goods, just about 200,000 tonnes are exported, such is Bangladesh’s dominance in the world market.
As mills here struggle to get fibre, reports of Indian jute finding its way into Bangladesh, Pakistan, China and Vietnam not in insignificant quantities and not necessarily officially are surfacing regularly. In a short crop season like the present one, the government should discourage exports of fibre and be “intolerant of it getting smuggled out,” says an IJMA official. The new jute season will start in July for which sowing operation has begun. The new crop, the initial forecast for which is quite encouraging, will start arriving in progressively growing quantities from August.
But, IJMA points out quoting a report by Ernst & Young that jute productivity here is compromised by restricted availability of certified seeds and also due to limited awareness of growers of benefits to be derived from using HYV seeds. Requirements of certified seeds are estimated at 5,500 tonnes. The availability will, however, be a fraction of that.
The bane of jute cultivation continues to be farmers forced to use low quality unbranded seeds. As a result, they are condemned to low productivity and not able to take full advantage of good weather. What is also adding to the woes of jute growers in West Bengal, Assam and other centres are good quantities of certified seeds being spirited away to a neighbouring country. “We have brought all this to the notice of the government and now waiting for it to act,” says the IJMA official.