Jute farmers in West Bengal, who had shifted to maize in 2020-21 because of the remunerative price it fetched in the previous season, are now making a come-back to the fibre as prices have surged by more than 50 per cent over the last few months.

Raw jute prices, which were ruling at around ₹4,750 a quintal at the beginning of this season in July 2020, is currently hovering around ₹7,100, a surge of almost 50 per cent. This has encouraged farmers to go in for a higher sowing of the crop during the current season. Jute sowing usually starts by the end of March and continues up to the end of May.

“During the season 2020-21 (July-June) there was a perceived shortfall in production due to poor weather conditions following the cyclone Amphan and persistent rainfall during the sowing period. This impacted the yield which was lower. This pushed up prices of raw jute. Buoyed by the good prices that the crop fetched, we are expecting bumper sowing of the crop during the coming season (2021-22),” Raghav Gupta, Chairman, IJMA (Indian Jute Mills’ Association), told BusinessLine.

Production impacted

The poor weather conditions and the migration of jute farmers to other crops such as maize dragged down raw jute production to 55 lakh bales in 2020-21, as against an average production of around 65-70 lakh bales.

While the cyclone Amphan in May 2020 and the subsequent rains destroyed the crop in Bengal, heavy rainfall in North Bengal areas affected the crop in the region. Severe rain in 21 districts of Assam in July-August also impacted production of raw jute in the region.

The carry over stock from the previous season’s production (2019-20) was close to 20 lakh bales (of 180 kg each).

The total consumption of jute is estimated to be close to 75-80 lakh bales, which includes the demand from both organised and unorganised sector. With the drop in production there was a “perceived shortage” which pushed up prices.

While the MSP (minimum support price) for raw jute (TD-5 variety) for 2020-21 was ₹4,225 a quintal, jute price was hovering around ₹4,500-5,500 a quintal between July-September 2020 (at the beginning of the season).

Following the sharp increase in prices, the Jute Commissioner restricted fresh purchase of raw jute beyond two months’ consumption requirement.

Higher production expected

The industry is expecting a 50-60 per cent increase in area under jute cultivation this coming season based on initial estimates. The sowing acreage, which had dropped to 6.5 lakh hectares in 2020-21, is estimated to increase to 7.5 lakh hectares during the coming season.

“There is a very good availability of seeds this year and farmers who had moved to maize last year are making a come back to jute encouraged by the surge in raw jute prices,” Gupta said.

The industry requires about 5,500-6,000 tonnes of seed to cover the jute growing areas on an annual basis.

The CCEA has approved a higher MSP of ₹4,500 a quintal for raw jute during the upcoming season 2021-22. This is also likely to boost sentiments of jute farmers and sowing is expected to be higher this year, said the owner of a jute mill in Bengal.

Raw jute production is estimated to be close to 80 lakh bales if the weather conditions remain favourable.

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