Jute mills closed in the last several months
Bangladesh has 94 spinning mills in the country, of which
around 20 were closed down in the last 7/8 months and many more
mills are running below their capacity and will be forced to
close down soon if the situation doesn’t improve. According to
industry players, the implementation of the mandatory packaging
law could rescue the local millers by increasing demand in the
domestic market. Though the law was passed in 2010, the
government is yet to implement it mainly due to an absence of
associated rules and regulations.
Jute mills are also affected due to a depressed international
market and currency devaluation in India. But the major reason
behind the closure of the factories is the government's failure
to implement a packaging law for compulsory use of jute sacks to
pack food grains and other items.
Exports of raw jute and jute sacks and bags plunged by a half
so far this fiscal year. However, exports of jute yarn and twine
that account for half of the country's total exports of jute and
jute goods increased by nearly 6% during the first nine months
till March this fiscal year.
According to Shabbir Yusuf, President of the Association, the
global demand has gone down, while production cost has
increased. Moreover, Syria which was a big market for
Bangladesh's jute yarn, imported around 70,000 tonnes of yarn a
year is totally off now because of the ongoing political unrest
there. Also, Iran which used to import around 40,000 tonnes of
yarn a year from Bangladesh is also at a halt because of US
sanctions against the country.
Kaihan N Rahman, Deputy Managing Director, Pubali Jute Mills
said that the current adverse situation has forced us to lay off
workers temporarily. Pubali used to make mainly jute sacks and
bags and export to countries like India, Thailand, Egypt, Syria,
Turkey, Iraq and Sudan. Most of these markets have been facing
political turmoil for months, while devaluation of the Indian
currency has shrunk Bangladesh's exports of jute and jute goods
As per Bangladesh Jute Mills Association (BJMA), 5/6 jute
mills, including Pubali, Mohsin Jute Mill and Ajax Jute Mills,
were closed in the last several months.