The Centre is expected to come up with the revised pricing for jute bags used in packaging of foodgrains in the next two to four months, according to the Indian Jute Mills Association (IJMA).

The Cabinet Committee on Economic Affairs (CCEA) on August 28 approved the new pricing methodology for B-twill jute bags, used for foodgrains packaging, based on the report of a Tariff Commission. The new methodology for calculating jute bag prices was a long-standing demand of the jute industry players.

“The notification of the revised price by the government will take some time. It is in the process. I see a timeline of anything between two-four months,” Indian Jute Mills Association Chairman Raghavendra Gupta told businessline.

According to Gupta, the new pricing methodology will ensure enhanced pricing for jute bags purchased by the government agencies.

Mills expect the new pricing methodology for jute bags would translate into a 4-5 per cent higher pricing for each bag, providing a big boost to the industry. On an average, around 72-75 per cent of a jute mill’s sales are happening through the Union government.

Industry participants said as the new pricing methodology is based on an authentic cost study, it is more transparent, dynamic and responsive to market changes compared to the existing one, which was running on a temporary pricing provision. The existing pricing system led to financial strain on jute mills because it did not keep pace with rising costs.

The Government purchases jute sacking bags worth ₹12,000 crore every year for packaging of foodgrains, ensuring guaranteed market for the produce of jute farmers and workers. Average annual production of jute sacking bags is about 30 lakhs bales (9 lakh tonnes) and the government has been procuring sacking production of the jute mills in order to protect the interest of jute farmers, workers and persons engaged in the jute Industry.

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