Commercial trading of jute allowed

The Union textiles ministry has allowed Jute Corporation of India (JCI) for commercial buying and selling in the commodity, an official source said on Thursday.

An agreement to this effect was signed in New Delhi on Wednesday, he said. The official said though the ministry has agreed to the demand of JCI to allow them to go for commercial operation, however, it has declined to link such purchase with allocation of B Twill sacking bags orders of various government agencies to mills.

It has, however, agreed that JCI will be given 10 per cent administrative cost for conducting MSP operation, he said.

Under the existing scheme, purchase of raw jute by JCI under the MSP operation is linked with allocation of B Twill jute bags to mills, which means mills getting government order for supply of jute bags had to compulsorily purchase a significant amount of raw jute from JCI.

JCI proposed to start commercial operation as market price of raw jute had shot up much above the minimum support price, industry sources said.

JCI is the nodal agency to conduct MSP operation in jute, but farmers had refused to offer their produce to JCI in 2004-05 (July-June) as market price of raw jute during last 11-12 months was much above the MSP. This implied that JCI had practically no work to do.

"In our view, commercial operation, unlike MSP operation, should be made based on commercial judgement of JCI and there should be no element of compulsion for purchase of raw jute by mills from JCI under B twill linked or any other arrangement," a mill owner said.