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Country to lose jute sacks export market to India, China

Industry insiders say

Sajjadur Rahman
Bangladesh is going to lose export markets of jute-made sacks and bags to India and China, which are coming up faster to share Bangladesh's monopoly market, industry people said.
Exporters said these two countries import raw jute from Bangladesh and later sell value added items, including sacks and bags to other countries. Raw jute export has also increased because most of the state-owned jute mills,-which produce sacks, are closed. Only four to five mills in the private sector produce sacks and bags, which, the exporters said, is very inadequate.
They said Bangladesh is missing huge amount of foreign currency for exporting raw jute instead of sacks and other jute goods.
’ Export price of raw jute is around Tk 13,000 a tonne, but its price becomes Tk 35,000 if it is a finished goods (sacks)," Salim Reza, vice chairman of Bangladesh Jute Exporters’ Association, told The Daily Star | yesterday.
According to official data, during the July-December period this fiscal (2007-08), Bangladesh exported raw jute worth US$82 million, a 13.18 percent increase from the US$72 million exports during the corresponding period in the last fiscal year.
While Bangladesh's jute goods export has declined by about US$2 million to US$166 million in the first half (till December) of the current fiscal year compared to the same period of the last fiscal year.
India, China and Pakistan
have become major buyers of Bangladeshi raw jute in the recent time, exporters said.
During July-December of FY 2007-08, China has imported raw jutes worth US$9.12 million from Bangladesh, while India imported US$13.72 million worth of raw jute, Export Promotion Bureau data show.
Other major buyers of Bangladeshi raw jute are Ivory Cost, Russia, Indonesia and Thailand.
"India and China, which import raw jute from Bangladesh and later sell value added products to other countries," Gopi Kishan Sureka, a local jute exporter, said.
He said: "Recently, a buyer from Taiwan has told me that he got offer from China suppliers at 10 percent less price than I offered him."
He blamed closure of government jute mills for another major reason for losing the
sack export market to China and India.
Salim Reza said China and India's own consumption also increased significantly in recent time.
Bangladesh had a monopoly market of raw jute and jute goods for long. The country made bags, sacks, sand bags, hessian bags, food grade bags, yarns etc by jute.
Jute-made bags are used for packing agriculture commodi-
ties like cotton, coffee, cocoa beans etc. Sand bags made for flood control are also hessian sacks. Since the quality of Bangladesh jute is the best in the world, light weight hessian sacks made here are even much better than heavy jute bags made in other parts of the world.
According to Bangladesh Jute Exporters Association, the country's local jute demand is around 25 lakh bales per year.