Editorial
Export of jute products in crisis
Stakeholders' suggestions should evoke response
THE jute industry faces a fresh spate of problems stemming from a fallout of the global financial meltdown. The recessive trends have triggered a fall in the demand and prices of jute products. The price of jute goods have decreased by about 15 percent. With higher cost of production entailed by our industry, the falling international price has turned out to be a double jeopardy. Many jute mills are having to suspend production while others are incurring losses by selling their products at prices that do not even cover costs.
The jute industry had already been pushed down the slippery slope -- thanks to the laid back policies of successive governments, which led to closure of many of the industrial units. And whatever remains of the industry is now faced with a newer crisis. As a result, the livelihoods of around 80,000 workers are threatened. More seriously, the existence of the jute industry is in jeopardy -- unless, of course, well-thought-out measures are taken to bail the jute industry out of the present crisis.
The state-owned jute industry under the BJMC has a problem specific to itself. The units have an idle capacity because of shortage of raw jute which is attributable to paucity of funds in the hands of BJMC, a perennial issue for it.
The Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners' Association (BJSA) in the private sector have put forward certain recommendations to the government: reduction of interest rate on loans as working capital, increase in export subsidy, devaluation of currency and creation of a crisis fund. Insofar as decreasing interest rate and devaluation of currency go, these have been demanded by industry and chamber leaders in general. We have always advocated a reduction in the spread between deposit rate and lending rate, and so far as devaluation is concerned, we quite see the fact that Indian prices are lower and more competitive than ours because they have devalued their currency by 21 percent.
It is of utmost importance that the government sit with BJMC, BJMA and BJSA and assure them of whatever support they can provide in overcoming the constraints they face in the backdrop of the global meltdown.
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