Spiralling prices of foodgrains and edible oil and low jute prices in the last couple of months have prompted a large number of jute farmers to shift to paddy and oilseed cultivation in the eastern part of the country.
Raw jute (TD-4 variety) prices dropped to Rs 1,170 a quintal on account of cheap imports from Bangladesh in the beginning of this year, when the Union government scrapped the duty on import of raw jute and jute products from Bangladesh, Bhutan, Maldives and Nepal.
With jute farmers anticipating lower prices for their produce, many of them have opted for paddy and oilseeds in the next cropping season. As a result, the overall jute production is expected to be about 30 per cent lower in the nest jute season.
Last year too, the overall production, which was pegged at 95 lakh (9.5 million) bales (1 bale =180 kg), was actually less by 5 lakh bales.
A speculation of a lower crop in the next season, beginning July, coupled with large-scale hoarding of jute, has increased domestic jute prices by almost Rs 400 a quintal in the last two months. Imported jute from Bangladesh is quoting Rs 100 a quintal more than the local produce.
"In spite of high prices of imported jute, many domestic mill owners are sourcing raw materials outside India as is it is difficult to purchase jute in bulk from the local market," said Ghanshyam Sarda, a jute mill owner in West Bengal.
Jute production from Bihar is set to drop as the sowing area in the state has decreased by 50 per cent, with farmers shifting to paddy cultivation, according to informal estimates by government sources. The state accounts for about 12 per cent of the country's overall jute production.
In Assam too, also accounts for about 10 per cent of the production, there has been a 20 per cent decline in the jute acreage.
In West Bengal, which generally accounts for more than 65 per cent of the production, the sowing area has declined by 25 per cent, with a majority of farmers shifting to oilseeds production, which incurs a relatively low input cost.
