The government yesterday temporarily reopened raw jute export in order to clear pending export orders which amount to around 277,000 bales.
According to jute ministry, a number of 251 letters of credit (LC) have been pending since November 3, 2015 and the decision to lift the bar on export is only to clear the pending LCs.
The decision was taken following request from exporters. “No new LC to export raw jute can be opened as per the dicision,” said Muhammad Kefayetulla, director of the Department of Jute.
He said the pending LCs were opened by 41 companies, and only they would get the facility to export during this period.
On December 2, 2015, the government issued an order to stop all kinds of raw jute export as an effort to implement the Mandatory Jute Packaging Act 2010. The order was made to ensure necessary supply of raw jute to local industry which saw a surge in demand after the law made it mandatory for local rice millers to use jute sacks.
The requirement has increased local demand of jute sacks to about 360m annually.
However, the government, on December 15, issued another order baning all raw jute exports except four specific types of processed jute. The permitted types of raw jute are automatic scanning, machine cut jute (10-120mm), jute silver and jute TRO.
Bangladesh’s current raw jute production is around 7m bales a year.
The jute mills under Bangladesh Jute Mills Corporation and private sector have an annual demand of about 4.5m bales of raw jute.
“As the local demand has increased, we now need an additional amount of 1.5m bales,” said Muhammad Kefayetulla. “Export in the current situation will, therefore, be tough if production in farmers level remains same,” he added explaining the ban.
However, the government plans to boost raw jute production from next year with cooperation from agriculture ministry so that the country can export raw jute like before.
Muhammad Kefayetulla said with an aim to increase raw jute production up to 8.5m bales from 2017, the government had already taken efforts to enable the country export raw jute after meeting local demand.