Jute MSP increased, fairs in open market likely not yielding next year

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Prices are unlikely to be profitable for jute farmers in the coming crop season (July-June), even as the average fare of raw jute hangs around Rs 8,500 a short at the end of the current jute season. The jute’s Production in the forthcoming crop season is calculated to gain 90 lakh bales from around 55 lakh bales manufactured during the current crop season. The central Government has already determined the minimum support price(MSP) at Rs 4,500 a quintal for the coming crop season, up from Rs 4,225 a quintal this season. And looking at the cost of cultivation it has been around 20% higher at Rs 48,000 an acre for the forthcoming crop season, and this combined with a The Jute Corporation of India procures around 5-6% of the total production for capacity constraints. But for the coming crop season, it may have to procure more if crop prices in the open market fall below MSP.

The Jute Corporation of India acquires around 5-6% of the total manufacture for volume problems. However, for the forthcoming crop season, it may have to obtain more if crop prices in the open market fall less than MSP. Satyanarayan Toshniwal, the North Bengal Jute Balers Association, pointed out that the price trend will back in in the coming crop season. Firstly, during July-August, the average fares may be above MSP at around Rs 5,000- 5,500 per shortly. But it will gradually fall as the crop year moves ahead, he said. 

In April, a shortfall in manufacturing led to the closure of 15 jute mills. The Jute Commissioner’s office, from the start of the coming jute year, needs to maintain control over the prices. And it issued the order for raw jute dealers to get entered with its smart jute portal for a specified period. While the time of the specified period is yet to be determined, the order is an objective for those dealing 500 kg of raw jute or more. The deputy jute commissioner Koushik Chakraborty pointed out that they are trying to make a data bank of raw jute traders to keep them on track.  

A different order has been declared for directing jute traders to clear stocks by June 25 and to enable some jute mills to restart operations. But these orders won’t influence the market prices in the forthcoming crop season as much as the order limiting dealers stock to 500 quintals. The stores of most large jute traders are utilised to stock other commodities, and few large buyers are left in the deal with the market getting flooded with small-time buyers keeping stocks much below 500 kg. This broken market has given a chance to a new sect of middlemen, who will not enter with the Jute Commissioner and cannot be routed by the government.

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