Amid the downward trend in raw jute export to Pakistan, Bangladeshi exporters see new potential as the Pakistan government decided to increase import of raw jute for promoting its exports of jute-based processed products.
Pakistan is the second largest importer of raw jute after India with 22.38% share of Bangladesh’s total exports of $130 million as of the last fiscal year, while India imported $46.89 million.
The Pakistan government has developed a strategy to encourage import of raw jute, mainly from Bangladesh, to promote exports of jute-based processed products from the country, reports The Dawn.
Bangladesh and India are the world’s two leading major jute growing states. The Pakistan government has suspended trade relations with India. Therefore, the preferred destination for the import of zero-duty jute is Bangladesh.
Currently, Pakistan is already importing jute from Bangladesh at a reduced rate under the free-trade agreement
According to Export Promotion Bureau (EPB) data, Bangladesh’s exports of raw jute to Pakistan declined by 11.15% to $29.10 million in FY2019-20, which was $32.75 million in the previous fiscal year.
On the other hand, overall export to Pakistan fell by 10.40% to $50.53 million in FY2019-20 against $56.40 million in the FY2018-19. Of the total exports to Pakistan, 57.58% came from raw jute export.
Jute exporters opined that the increased imports of raw jute from Bangladesh will be good for the jute growers as well as the exporters as the country has surplus raw jute due to the government closing down the state-run jute mills which would otherwise use the raw materials to produce jute products.
“Pakistan market is a great prospect for us as they do not grow jute. We are already exporting raw jute there and the declaration of importing more is good news for us,” Salim Reza, vice chairman of Bangladesh Jute Exporters' Association, told Dhaka Tribune.
While major export industries are struggling to survive the economic hit of the new virus, jute and jute goods are the exception as it had an 8.10% rise to $882.35 million in FY2019-20.
In the recent concluded 2019-20 fiscal year, Bangladesh merchandise exports declined by 16.93%, from $40.53 billion in FY2018-19 to $33.67 billion in FY2019-20, according to EPB data.
Of the total amount, raw jute earned $130 million, up 15.48% from last year’s export receipts. Jute yarn and twine, the largest contributor to the sector, fetched $564.26 million, showing a 10.12% growth compared to the previous fiscal year.
On the other hand, jute sacks and bags saw a 28.58% surge to $106.54 million in the last fiscal year.
