Export earnings from jute fall 20pc in FY19

Export earnings from jute have fallen significantly because of the devaluation of the US dollar in the global market, the trade war between China and the US, the lack of a strategic marketing strategy and the high cost of production of raw jute, according to industry insiders.  

Export Promotion Bureau (EPB) data says jute and jute goods fetched USD 816 million in the fiscal year 2018–19, down from USD 1.02 billion recorded during the same period in the fiscal year 2017–18. This marks a negative growth of 20.41 per cent.

Enamul Haque Patwary, a former president of the Bangladesh Jute Goods Exporters’ Association, has described two key reasons behind the negative growth rate. Firstly, he said, the devaluation of the dollar in the global market has been the prime reason. Secondly, citing an example, he noted that jute-importing countries like Russia, Turkey and Egypt were also placing fewer orders due to currency depreciation. The Turkish dollar has depreciated up to 45 per cent.   

“In the global market, local currencies are depreciating against the dollar. But, the taka is getting stronger against the dollar. Hence, we are falling short in exporting goods compared to our competitor countries,” he added. Secondly, “a trade war between China and the US is also not helping us,” he added.

Patwary, who is also the managing director of the Jute and Bags Export Corporation, said, “Our company used to export jute goods worth USD 300,000–400,000 a year. Now, it has come down to 20 per cent, which is worth USD 320,000. Local jute prices are better than the export price. So, we get better prices by selling raw jute locally rather than exporting it.”        

India’s currency has been devaluated 20 per cent against dollar, which eventually helps exporters of jute goods to export in the global market, Patwary added.

Making a suggestion, he said, “We need to establish a jute council so that every representative from all the associations can participate for better cooperation.” The Bangladesh Jute Mills Corporation (BJMC) should take some initiatives to increase exports, he added.    

Explaining the reasons for such negative growth, Lutfur Rahaman, senior vice-chairman, Bangladesh Jute Goods Exporters’ Association, said: “African countries used to import huge quantities of jute bags from us. But we’re losing the market due to a high import duty of 15 per cent.”

Citing another reason, Rahman said: “Exports of jute goods to India have been affected due to the imposition of anti-dumping duties on natural fibre-based products from Bangladesh.”

When asked about the ways to counter such negative growth, Rahaman said the government should sign a bilateral trade policy support agreement with other countries to reduce the import duty. Also, the Generalized System of Preferences (GSP) facility should be given to this sector to improve its export performance.

“A strategic marketing plan for the promotion of jute and jute products in the global market is essential for us at this moment,” he added.

According to the EPB, the export of jute sacks and bags fetched USD 82.86 million in FY2018–19 as against USD 122.82 million in FY2017–18. The growth is a negative 32.54 per cent.  

African countries like Cameroon, Tanzania, Uganda, Ivory Coast, Kenya, Nigeria, Egypt and Sudan use jute-made sacks for food-grain packaging, but have stopped buying such sacks because their cropping season is over.

EA

 

Export earnings from jute fall 20pc in FY19

Export earnings from jute have fallen significantly because of the devaluation of the US dollar in the global market, the trade war between China and the US, the lack of a strategic marketing strategy and the high cost of production of raw jute, according to industry insiders. Export Promotion Bureau (EPB) data says jute and jute goods fetched USD 816 million in the fiscal year 201819, down from USD 1.02 billion recorded during the same period in the fiscal year 201718. This marks a negative growth of 20.41 per cent. Enamul Haque Patwary, a former president of the Bangladesh Jute Goods Exporters Association, has described two key reasons behind the negative growth rate. Firstly, he said, the devaluation of the dollar in the global market has been the prime reason. Secondly, citing an example, he noted that jute-importing countries like Russia, Turkey and Egypt were also placing fewer orders due to currency depreciation. The Turkish dollar has depreciated up to 45 per cent. In the global market, local currencies are depreciating against the dollar. But, the taka is getting stronger against the dollar. Hence, we are falling short in exporting goods compared to our competitor countries, he added. Secondly, a trade war between China and the US is also not helping us, he added. Patwary, who is also the managing director of the Jute and Bags Export Corporation, said, Our company used to export jute goods worth USD 300,000400,000 a year. Now, it has come down to 20 per cent, which is worth USD 320,000. Local jute prices are better than the export price. So, we get better prices by selling raw jute locally rather than exporting it. Indias currency has been devaluated 20 per cent against dollar, which eventually helps exporters of jute goods to export in the global market, Patwary added. Making a suggestion, he said, We need to establish a jute council so that every representative from all the associations can participate for better cooperation. The Bangladesh Jute Mills Corporation (BJMC) should take some initiatives to increase exports, he added. Explaining the reasons for such negative growth, Lutfur Rahaman, senior vice-chairman, Bangladesh Jute Goods Exporters Association, said: African countries used to import huge quantities of jute bags from us. But were losing the market due to a high import duty of 15 per cent. Citing another reason, Rahman said: Exports of jute goods to India have been affected due to the imposition of anti-dumping duties on natural fibre-based products from Bangladesh. When asked about the ways to counter such negative growth, Rahaman said the government should sign a bilateral trade policy support agreement with other countries to reduce the import duty. Also, the Generalized System of Preferences (GSP) facility should be given to this sector to improve its export performance. A strategic marketing plan for the promotion of jute and jute products in the global market is essential for us at this moment, he added. According to the EPB, the export of jute sacks and bags fetched USD 82.86 million in FY201819 as against USD 122.82 million in FY201718. The growth is a negative 32.54 per cent. African countries like Cameroon, Tanzania, Uganda, Ivory Coast, Kenya, Nigeria, Egypt and Sudan use jute-made sacks for food-grain packaging, but have stopped buying such sacks because their cropping season is over. EA