Wheat imports to spur jute industry

With wheat import estimates during the current year pegged at about 5 million tonnes, the jute industry is gearing up for an order to supply two lakh bales of gunny bags (B Twill) valued at Rs 200 crore.

Jute industry sources pointed out that all 73 mills of the country had been put on alert for the order which is likely to be placed by the Centre shortly. A high-powered meeting between the Union agriculture ministry, food and civil supplies ministry, the Jute Commissioner's Office (JCO) and the organised mill sector have been convened on May 28 to fix the modalities for the supply.

The move to import, according to jute industry sources, comes in the wake of government procurement of wheat in the current season failing to meet the stipulated 15 million tonnes (MT) target by five million tonnes.

The government has already fixed tenders for the import of one million tonne of wheat at prices between $264 a tonne and $280 a tonne from Australia and the US. The prices, however, are higher than those quoted during the same time last year, varying between $60 and $75 a tonne. Bad weather conditions in those countries have resulted in the rise of per tonne cost of wheat.

Meanwhile, a Delhi-based non-governmental organisation has moved court to put an immediate check on the import of wheat. According to the NGO, with India's wheat production pegged at 73.7 million tonnes during 2006-07 against 69.3 million tonnes last year, the government's decision would hit the farmers hard and result in stock piling and non-remunerative prices.

According to an industry source, "the court case is genuinely standing as a barrier to the government's intention to import".

Feedbacks received from industry observers reveal that the demand for wheat over production has primarily resulted in the government going in for imports for the second consecutive year.

In the last two years, freight rates have also gone up considerably.

Annual jute packaging amounts to around Rs 2,700 crore on the supply of nine lakh tonnes of jute bags to different agencies during the kharif and rabi seasons.

Recent rumblings on the proposed dilution of the Jute Packaging Mandatory Act (JPMA), 1987, for replacing jute with plastic materials have also created a flutter in the political circles.

The organised mill sector has also kept its options open to knock on the legal doors in the advent of dilution.