Southeast University

Course title: Industrial Management

Assignment on Raw Jute Submitted to: Dr. ANM Ahmed Ullah

Associate Professor Department of textile Engineering

Submitted by: Nargis Sultana Nipu ↔ 2013000400013 Md. Mofizur Rahman Sazal ↔ 2013000400036 Moniruzzaman Monir ↔ 2013000400035 Md. Mazadul Islam Ripon ↔ 2013000400016 Ashfaque Ahamed Supto ↔ 2013000400012

Submission date: 22/08/15

Raw Jute:Jute is a long, soft, shiny vegetable fibre, golden or silvery in colour, which can be spun into coarse, strong threads. It is one of the most affordable natural fibres and presently is the 2nd most important. It is produced from plants in the genus Corchorus and the fibre is produced from both the cellulose (major part of plant) and lignin (woody part of plant). It is thus part textile, part woody fibre and is therefore extremely strong. Worldwide jute fabrics are often named as hessian and the sacks as gunny bags whereas in North America jute fabrics is commonly known as burlap.

The two most common types are white jute (Corchorus capsularis) and tossa jute (Corchorus olitorius). White jute was traditionally used to make ropes and twines and also a low cost, low quality, fabric for clothes of the poor in the regions where it was produced. Tossa jute fibre is softer, silkier, and stronger than white jute. This variety grows mostly in the Ganges Delta, i.e. in West Bengal and Bangladesh where it is known as paat from the start of the 19th century. Currently, the Bengal region West Bengal and Bangladesh are the largest global producers of the tossa jute variety.

Cultivation places:The Ganges delta contributes more than 80% of the jute production in the world. The Ganges delta can be sub-divided into the following geo-graphical regions in terms of jute cultivation:

Jat Area (Brahmaputra Alluvium): This comprises part of the districts of Dhaka, Mymensingh, Tangail, and Comilla of Bangladesh. The area annually receives fresh deposit of silts carried down by the flood water. Soils are acidic in, the texture varies from sand loam to clay loam. According to commercial quality, the best quality Jute, the Jat type, grows in this area.

District Area (Ganges Alluvium): This comprises part of the districts of Kushtia, Jessore, Khulna, Rajshahi, Pabna, and Dhaka of Bangladesh and major portion of West Bengal of India. This area has soil of slight alkaline clay loam to light loam in gray to dark gray color. The type of Jute grown in this area is known as District Jute, which is next to Jat Jute in order of quality. The jute fibre grown in this region is further divided into two major varieties, such as: Hard District Jute and Soft District Jute.

Northern Area (Teesta Silt): This comprises part of Dinajpur, Rangpur districts, East Bogra, and Sirajganj of Bangladesh and some parts of West Bengal of India. The region has sandy soil with low moisture retention capacity. Soil retention is slightly acidic. Northern type of Jute is inferior quality of the three commercial types.

Uses of Raw Jute:As well as for the continued production of ropes, yarn, twine, bags and sacks, today Jute has numerous more uses and is used to make paper, non-woven textiles, geo textiles, pseudo wood and as a substitute for fibre glass amongst many others. Indeed the product is so versatile that it is said to have thousands of uses and more and more uses are being discovered each day. Certainly due to it being environmentally friendly, it is likely to replace some of the synthetic products which are creating hazards to our earth.

As is known, jute was the single most important export item of Bangladesh till the end of the 1980s. With the ascendancy of export-oriented readymade garments (RMG), and later on of shrimp, jute lost its pre-eminent position. It presently occupies the third position in the export basket of Bangladesh. Agro-climatic environment made Bangladesh a natural home for producing the best quality jute in the world – Bangladesh has continued to remain world’s largest grower of quality jute. Indeed, jute production is concentrated mainly in and around South and South East Asian region. Other major producing countries are India, China, Thailand, and Myanmar. Bangladesh is the leading exporter of raw jute globally, whilst India is the largest producer as well as consumer of jute products in the world. Bangladesh’s jute sector started to face a critical time particularly since the 1990s, as jute started to face increasing competitive pressure from synthetic substitutes, with technological developments leading to progressive replacement of natural raw materials. Lack of significant efforts and required investments towards product development and diversification as also an inability to undertake the technological transformation undermined jute’s prospects as a fibre. Failure to follow modern marketing procedures and international trade practices led to the demise of jute as an important globally-traded commodity. All these had adverse impact on production, consumption and export performance of jute.

Owing to environmental conditions, scarcity of land for cultivation, high input cost, high profitability of high-yielding variety (HYV) and hybrid crops, and an unfavorable jute-rice price ratio, jute at present tends to be cultivated in less productive land. The consequence of lower productivity and low profit thus gave rise to a vicious cycle. Low output prices, and inadequate marketing support and extension services had a significant negative impact on jute cultivation and export earnings (BJRI 2008). Governments and private sectors in jute growing countries only lately have started to undertake initiatives to address the attendant concerns. This renewed emphasis has been spurred due to the resurgence of global demand for jute as an environment-friendly commodity. A number of technological breakthroughs favoring diversified uses of jute fibre have also helped. The present paper makes an attempt to analyses the challenges and opportunities in the world market for Bangladesh’s export-oriented jute sector, in view of the recent developments some of which have been flagged above.

EXPORT PERFORMANCE: This section will examine the export performance trends of raw jute and jute goods with a view to understanding global market behavior both at aggregate and disaggregate levels. As the data indicate, export-oriented jute sector of Bangladesh used to contribute USD 313.1 million of export revenue in FY1972-73, which was about 90 per cent of the total export from Bangladesh at that time. This had come down to 23 per cent by FY1990-91, whilst in FY2000-01 the share came down to 4.6 per cent, which declined further to 2.7 per cent in FY2008-09 (Table 1). It is notable, however, that share began to rise over the next year to reach 4.5 per cent in FY2009-10. Phenomenal growth of Bangladesh’s export oriented garments sector in the 1990s was the major reason for the decline in the share of jute; however, fact remains that the picture also did not improve much in terms of absolute value. It is interesting to note that, in FY2009-10 total export of Bangladesh was USD 16.2 billion, which was higher than the total amount (USD 15.3 billion) earned from raw jute and jute goods export between FY1972-73 to FY2009-10. Total export of raw jute and jute goods did not increase significantly; it rose from USD 313.1 million in FY1972-73 to USD 736.4 million in FY2009-10 (Table 1), whilst total export of Bangladesh rose from USD 348.4 million to USD 16.2 billion in FY2009-10. However, Bangladesh continued to remain the leading exporter globally with the country accounting for over 90 per cent of the world’s raw jute and allied fibre export. It is important to mention here that, raw jute and jute goods export increased significantly and almost doubled in FY2009-10 compared to FY2008-09 (by about 98.5 per cent), to reach USD 736.4 million. In FY2009-10, Bangladesh exported 4,471 thousand bells of raw jute and 906 thousand tons of jute goods. Major jute items that were exported included – raw jute, jute yarn and twine, jute carpet, jute ropes, and other jute items.

Table 1: Share of Jute Export

Year Value (Million USD) Share (%)

FY1972-73 313.1 89.9

FY1980-81 487.3 68.6

FY1990-91 394.6 23.0

FY2000-01 297.5 4.6

FY2004-05 334.9 4.0

FY2007-08 483.4 3.4

FY2008-09 417.0 2.7

Table 2 provides relative growth rates of raw jute and jute goods export over the last four decades, since independence. This growth dynamics indicates three clearly discernible phases. As was noted earlier, at independence, raw jute and jute goods used to be the dominant export items of Bangladesh. During the 1970s export growth of jute and jute items was 6.8 per cent. Following this, in the 1980s and 1990s, export under these items fell down sharply, with negative growths of (-) 1.4 per cent and (-) 1.4 per cent respectively. It was a time when the RMG sector emerged as the major player in Bangladesh’s export scenario, registering remarkable growth performance and posting increasingly rising share in the total export basket. Over the last decade, between FY2000-01 and FY2009-10, export growth of raw jute and jute goods were 13.3 per cent and 6.4 per cent respectively (Table 2). This reemergence of the jute sector as an important export commodity now reinforces the reason for renewed attention to design the appropriate policies for this sector by taking cognizance of the new developments. It is interesting to note that during the financial crisis year of FY2008-09, export of raw jute and jute goods suffered significantly and posted negative growth rates of (-) 10.5 per cent and (-) 15.4 per cent respectively. However, in FY2009-10 both the items were able to regain positive and high growth rates, and attained 32.5 per cent and 100.6 per cent growth rates respectively. For FY2010-11 export target for raw jute and jute goods have been set at USD 255.2 million and USD 860.2, which were 30 per cent and 59.3 per cent higher than the actual export in FY2009-10.

Table 2: Growth Performance of Jute and Jute Goods Export by Bangladesh

Item FY1973 –

FY1981

FY1981 –

FY1991

FY1991 –

FY2001

FY2001 –

FY2010

FY1973 –

FY2010

Raw jute 1.0 -1.2 -1.2 13.3 -0.4

Jute goods 9.7 -1.5 -1.4 6.4 0.7

Total raw jute and jute goods

6.8 -1.4 -1.4 8.3 0.4

Total export from Bangladesh

10.3 9.9 13.6 12.4 10.9

Bangladesh jute report -December 10, 2014 Rates supplied by the Bangladesh Jute Association JUTE VARIETY BALES FOB Narayanganj

(One bale = 180 kg) (Taka per bale) Ready Position (in taka)

Bangla white special (BW special) 12,800 Bangla white A (BWA) 12,500

Bangla white B (BWB) 11,600 Bangla white C (BWC) 10,100

Bangla white D (BWD) 9,650 Bangla white E (BWE) 9,200

Bangla tossa special (BTS) 13,100 Bangla tossa A (BTA) 13,800

Bangla tossa B (BTB) 11,900 Bangla tossa C (BTC) 10,400

Bangla tossa D (BTD) 9,950 Bangla tossa E (BTE) 9,500

WRS/TRS, HABIJABI, CUT ROPES

Bangla white rejection (BWR) 8,250 Bangla white habijabi (BWH) 6,300

Bangla tossa rejection (BTR) 8,500 Bangla tossa habijabi (BTH) 6,300

CUTTINGS

Bangla white cuttings A (BWCA) 5,800 Bangla white cuttings B (BWCB) 5,600

Bangla tossa cuttings A (BTCA) 6,100 Bangla tossa cuttings B (BTCB) 5,900

MESHTA

Meshta special 12,800 Meshta a 12,500 Meshta B 11,600

Meshta C 10,100 Special meshta cuttings 5,800

Ordinary meshta cuttings 5,600 Meshta- SMR 8,000

STATE OF THE MARKET—REMARKS

Quality - good Condition - fair Narayanganj

Imports - About 10,000 Qntl. Daulatpur imports - About 20,000 Qntl.

Market trend - As usual

NOTE: Raw jute exports during 2013-2014 (01.07.2014 to 31.07.2014) = 9,559 bales

Value 73.60 million taka ($1 = 77.85 taka)

SOURCE AND DESTINATION OF RAW JUTE AND JUTE GOODS Interest in jute fibre, as was noted above, has resurrected recently in view of environmental friendliness of the product. It is now reckoned to be a good alternative to the use of synthetic fibres such as carbon or ceramic fibres which are subject to environmental concerns. Jute is an environment-friendly product since the fossil fuel content is lower compared to other fibres; jute is also an economically profitable crop as it uses 10 per cent less energy. At the same time jute absorbs a large amount of carbon dioxide from the atmosphere. Reduction of world demand for jute since 1980s was one of the primary reasons for the gradual decline that the jute sector of Bangladesh has experienced over the past years. The increasing global awareness about the advantage of using natural fibres has now resulted in a rise in global demand for jute goods. Globally, demand for diversified jute products has been growing particularly in developed country markets such as USA, Canada, Australia and Japan, where consumer groups are becoming increasingly conscious about carbon footprint of consumer goods. Bangladesh is in a unique situation to take advantage of this growing consumer concern and the resultant interest.

For the last five years (from 2005 to 2009), export of raw jute in the world market has increased by 39.5 per cent, and export of jute products has increased by 57.6 per cent. In 2009, Bangladesh was the largest raw jute exporter with a share of about 85.7 per cent of the total global export. On the other hand, China occupied the topmost position among the exporters of jute goods accounting for 58.1 per cent of the total global export. India accounted for 8.5 per cent and Bangladesh for 6 per cent of export of jute products in the world market. Between 2005 and 2009, China’s export of jute goods increased by 181.1 per cent, whilst that of Bangladesh declined by 11.1 per cent, although the benchmark figures for the two countries were significantly different (Table 3).

Table 3: Top Exporters of Raw Jute and Jute Goods in the World

(Million USD)

Exporter 2005 2009 Change in

2009 over 2005

(%)

Value Share of World Export (%)

Value Share of World Export (%)

Raw Jute

World 139.5 - 194.5 - 39.5

Bangladesh 121.9 87.4 166.7 85.7 36.7

India 2.9 2.1 7.1 3.6 139.4

Tanzania 0.3 0.2 8.6 4.4 3333.7

Jute Goods

World 2979.9 - 4695.5 - 57.6

China 970.9 32.6 2729.6 58.1 181.1

India 398.2 13.4 398.3 8.5 0.0

Bangladesh 318.9 10.7 283.7 6.0 -11.1

In 2009, Bangladesh exported 322.6 thousand tonnes of raw jute worth USD 166.7 million (Annex Table 1). Her export was concentrated in two major markets, both of which were in Asia, Pakistan (32.2 per cent) and China (28.6 per cent). These two together accounted for more than 60 per cent of the raw jute exported by Bangladesh in 2009. Raw jute export to Pakistan was USD 52.1 million (96.1 thousand tonnes), and to China USD 46.2 million (94.9 thousand tonnes). It is to be noted that, Bangladesh does not face any tariff on her export of raw jute to these two countries. Export of raw jute has posted a growth of 9 per cent for China and declined by (-) 12 per cent for Pakistan in 2009 compared to 2008. For jute yarn, Bangladesh’s major markets were Turkey, Belgium and India. In 2009, export of yarn has decreased for Belgium by (-) 18 per cent; and for Turkey by (-) 1 per cent and (-) 4 per cent for two HS categories. In contrast, in India the growth was significant (79 per cent). Export of jute woven fabric registered very high growth in the markets of India, New Zealand and Korea, with 24 per cent, 120 per cent and 23 per cent respectively in 2009 compared to 2008. Indonesia was the largest market for ropes; however, export was 58 per cent lower compared to 2008. Sacks and bags had to face 4 per cent and 5 per cent ad valorem tariffs in India and Indonesia. Exports of these items to India have declined considerably by (-) 31 per cent in 2009 when compared to 2008. Sacks and bags export to Indonesia has increased in 2009 compared to 2008 by 15 per cent. Bangladesh also exports an insignificant amount of footwear to United Kingdom (UK) and Italy. Global import of raw jute increased by 5 per cent in 2009 compared to 2008. However, yarn, woven fabric, ropes, and sacks and bags import had faced a decline during this period.

Bangladesh accounted for the major share, 87.8 per cent and 47.5 per cent of the export of two major types of jute fibres in 2009; the growth rates for these (for 530310 and 530390) were 15 per cent and 27 per cent respectively compared to 2005 (Annex Table 2). Tanzania and Greece, which are the two major exporters of jute fibre, accounted for 4.6 per cent and 13.2 per cent share of global exports in these two items in 2009. Estimates for the year 2009 reveal that the world market for raw jute increased by nearly 16 per cent and 4 per cent respectively over last five years; Bangladesh’s export growth was 15 per cent and 27 per cent in this period. Volume-wise global export of Bangladeshi raw jute declined from 328 thousand MT to 314 thousand MT between 2005 to 2009, with a negative growth of (-) 4.3 per cent.

Product-wise export performance, revealed that Bangladesh is the second highest exporter of jute products after China. Traditional products, such as jute yarn, woven fabric, ropes and jute carpet collectively constituted 64.5 per cent of the total traditional exports of Bangladesh in FY2009-10. The top traditional items, except ropes witnessed an increase in 2009 compared to 2008. Jute handbags, knitted fabrics, power loom fabrics, non-woven cloths, handicrafts and jute clothing bags formed a major part of jute earnings.

Major Asian destinations of raw jute and jute goods export were India, Turkey, Pakistan, China, Russia, Indonesia and Malaysia. Major exported items in these countries were raw jute, yarn and fabric. Two South East Asian countries, Indonesia and Malaysia imported primarily ropes and sacks and bags from Bangladesh.

Region-wise distribution of jute goods export revealed that Middle East was the major destination (21.6 per cent) of exported jute items from Bangladesh (Table 5). North Africa, the second most important destination, imports about 11.9 per cent of Bangladeshi jute items. Other major importers were – EEC countries, South East Asia and Australia. Hessians were mainly exported to Middle East, EEC countries, America and North Africa. Sackings were exported to North Africa, South East Asia, Middle East, East Africa, West and South Africa and Australia. CBC is generally exported to Australia, EEC countries, Middle East, rest of America, rest of Europe and USA.

Table 4: Region-wise Distribution of Jute Items Export from Bangladesh (BJMC and BJMA) in FY2006-07

(Million USD)

Destination Hessian Sacking CBC Others Total

Total 37.8 104.5 18.6 32.5 193.4

Rest of the world 5.9 34.4 2.9 0.2 43.3

Middle East 11.8 14.4 0.2 15.4 41.8

North Africa 3.0 17.1 0.0 3.0 23.0

EEC countries 8.1 2.1 4.7 5.5 20.3

South East Asia 0.6 16.0 0.0 1.4 18.0

Australia 0.8 2.9 10.6 0.9 15.1

USA 5.5 1.3 0.0 3.8 10.7

East Africa 0.1 10.1 0.0 0.0 10.2

West and South Africa

0.1 4.2 0.0 0.4 4.6

Rest of America 1.8 2.1 0.1 0.4 4.4

Russia 0.0 0.0 0.0 1.3 1.3

Rest of Europe 0.2 0.1 0.1 0.3 0.7

Market analysis shows that, Bangladesh’s top export destinations (country-wise), in the year 2009 were Pakistan, China, Turkey, India, Belgium, Australia and Indonesia. Exports to majority of these countries had declined during 2009 compared to 2008. Imports of raw jute by Pakistan in 2009 stood at USD 53.8 million. Pakistan imported almost the entire quantity of its jute fibre requirements from Bangladesh (96.6 per cent of her total import). China and India obtained 99.8 per cent and 100 per cent of their total raw jute import from Bangladesh. Yarn export of Bangladesh to Turkey, India and USA covers 96.7 per cent, 98.9 per cent and 89.5 per cent of their total market demand respectively. Fabric export to Australia meets 79.5 per cent and sacks export to India meets 69.1 per cent of the respective total market volume. Turkey and Belgium primarily imported multiple jute yarn from Bangladesh, which accounted for 91.3 per cent and 65.1 per cent of their total jute yarn import.

Conclusion:Jute is the golden fibre is our country. There was a time when we are at number one in raw jute export. Because of our environmental problem and some other problems production growth of jute is decreased but nowadays some researcher has research on jute to produce more fibre than time.