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27 May, 2019 12:59:57 AM
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Export earnings from jute fall as taka gains against dollar

SHARIF AHMED, DHAKA
Export earnings from jute fall as taka gains against dollar

Export earnings from jute have fallen significantly due to the devaluation of the dollar in the global market, a trade war between China and the US, the absence 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 695.52 million in FY2018–19 (July-April), down from USD 889.74 million recorded during the same period in FY2017-18 (July-April). This marks a negative growth of 21.83 per cent.

Talking to The Independent, Enamul Haque Patwary, former president of the Bangladesh Jute Goods Exporters' Association cited two key reasons and said that the devaluation of the dollar in the global market had been the prime reason behind this negative growth in the country’s jute exports.

Citing an example, he said that jute-importing countries like Russia, Turkey and Egypt were placing fewer orders because of their currency depreciation. Turkey’s dollar had 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. So, we fell short in exporting goods compared to our competitor countries,” he added.

Secondly, he said, “A trade war between China and the US is also not helping us.”  

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 by 20 per cent.”

The export of raw jute fetched USD 101.58 million in FY2018-19 (July-April) as against USD 132.84 million in FY2017-18.

“Local jute prices are better than the export price. So, we get better prices by selling raw jute locally rather than exporting it,” said Patwary.       

The Indian rupee had devaluated 20 per cent against dollar, helping the country to export jute goods in the global market, Patwary added.   

“We need to establish a jute council so that a representative from all the associations can participate for better cooperation,” he suggested.

Bangladesh Jute Mills Corporation (BJMC) should take some initiatives in order to increase exports, he added.    

Explaining such negative growth, Lutfur Rahaman, senior vice-chairman of the 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: “The export of jute goods to India has 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 ink 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 in order 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 73.52 million in FY2018–19 (July-April) as against USD 110.80 million in FY2017–18. The growth is 33.65 per cent negative.   

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

EA

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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