The forecast for bumper jute crop this year has caused more worry to almost a million Indian farmers, with the minimum support price (MSP) mechanism in a shamble bumper crop would mean a sharp decline in price, farmers will have to dispose of their produce at whatever price they can get. However, industry sources feel the bumper crop would be an advantage in terms of lower cost of production for the Rs. 35bn jute products industry, which is trying to counter a strong plastic lobby. 20% jump in jute output to 10m bales in ‘00-01 from about 8.5m ales in ‘99-00 has been projected by The Indian Jute Mills Association (IJMA). "The crop this year is likely to be more than 10 m bales of 180 kg each because of extremely good weather between February and May, according to IJMA. The bumper crop would have yielded significant benefits to farmers in terms of higher volumes, but as the average industry demand, according to IJMA estimated, it is only in the region of 8.6m bales per annum, the farmers will have little option than to dispose of their extra holdings. Apart from industrial consumption, about 6,00,000 to 7,00,000 bales which is used for domestic purposes in rural areas, India will have to import about 7,00,000 bales of jute from Bangladesh for specialized products. If production remains in accordance with what the IJMA is projecting, the govt. will have to intervene in a big way to help the farmers as by the end of June ’00 (‘99-00), the carry-over stock will be about 2.2m bales. This will create pressure next year on farmers as the industry is unlikely to consume more than its requirement of 8.6m bales, jute experts said. |
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