Jute industry has been struggling to keep up with demand due to Covid caused shortages | Valdamark

What is the Jute Industry?

Jute is a natural, biodegradable fibre that has been utilised for centuries and remains important today. Jute plants are grown in warm climates and thrive along riverbanks or coastal areas, often producing high-yield crop harvests as well.

The Jute industry is focused primarily on producing Jute products and Jute-related products, such as fabrics, cords, and twines. Jute fibres have many uses in addition to the creation of fabrics and textiles; Jute can also be processed into some well-known jute goods including sacks, mats, carpets, door mats, industrial yarns, wall hangings, and packaging materials.

Jute’s status as a green natural fibre has made it increasingly popular in the textile industry since its properties are naturally water resistant and fire-retardant while being biodegradable. The industry makes up a vital part of the global economy and is driven by environmental considerations more than ever before.

Production and Jute Trade Issues Caused Due to Covid-19

The onset of the pandemic in 2020 came with harsh implications for the jute industry, as the interruption of production and supply chain disruption for raw materials had a destabilising effect on international markets. The COVID-19 pandemic caused supply problems for much-needed raw materials, making it harder for businesses to maintain operations - particularly as customers shifted online, increasing demand for packaging material. As demand fluctuated, companies struggled to restock necessary materials in time to meet orders. This not only affected the industry's immediate ability to produce finished goods but also their bottom line as the margin was squeezed by cost increases across the supply chain.

India's proud jute industry, which has been producing high-quality goods for over 150 years, was unable to deliver gunny bags worth Rs 1500 crore due to a lack of resources and supply chain disruptions from October until November 2021. Despite these challenges - the industry still managed to produce 4 lakh bales during this period.

At this time jute mills began running low on stock because there had been no significant increase in demand since earlier this year when people started to fear incoming shortages following reports that some farms might not be able to grow enough crops after what seemed at first glance like just another bad harvest.

The jute industry in Bengal is also facing unprecedented problems. The sector employs nearly 3 lakh workers and several thousand farmer families, but it's under stress with an increase in raw material prices that has caused closures among manufacturing units across India.

Indian Jute Mills Association – Comments

The raw jute drugget price is currently at around 7,000 Rs a quintal. The number of operating jute mills in Kolkata has decreased rapidly after the government fixed this import-substitute material's export ceiling and imports are down by 80%.

A recent proposal from the Indian Jute Mills Association Chairman Raghavendra Gupta did not get approval to scrap or revise prices up; it was simply refused – with no other option but for jute mills who source their supplies locally, like many companies do to buy them on behalf of textile makers if they cannot afford higher costs themselves. Production has dipped dramatically since cotton shortages began months ago with farmers either unable or unwilling to start manufacturing.

To ensure ongoing access to raw Jute, the Commissioner's office has implemented measures aimed at stabilizing prices for traders and millers. This intervention also seeks to prevent profiteering by curbing hoarding activities in this essential industry.

The History of the Jute Industry in India

India has a long and rich history of jute production. Jute is one of the most important materials to come out of India and has been used in numerous applications ranging from paper products to durable fabrics.

The popularity of jute began in the nineteenth century when Indian merchants started exporting their jute resources around the world. Jute's strong fibres soon became a dominant product in markets worldwide, leading to an explosion of jute factories throughout India. By the mid-20th century, India had become one of the world’s top producers of jute, with much of that output used for manufacturing rope and other materials.

While it's still a major industry today, its popularity has been on the decline due to modern synthetics replacing it in many areas of commerce. However, despite this decrease in demand for jute, India continues to benefit economically from its production thanks to its prominent place at the centre of this global industry.

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