JUTE AND JUTE PRODUCTS

WORKSHOP ON SECTORIAL SEGMENTS OF EXPORTS

Submitted by:-ABHINAV VERMA

MBA-IBROLL NO:- 03

JUTE and JUTE PRODUCTS

Jute is a long, soft, shiny plant fiber that can be spun into corse, strong threads. It is produced

from plants in the genus Corchorus, which see for botanical information and other uses. Jute is

one of the cheapest natural fibers and is second only to cotton in amount produced and variety of

uses. Jute fibers are composed primarily of the plant materials cellulose and lignin. It falls into

the Bast fiber category (fiber collected from bast or skin of the plant) along with Kenaf,

industrial Hemp, Ramie and Flax(Linen) fiber.

Jute is called in different names in different parts of the world. For instance, jute fiber is often

called Hessian fiber, jute fabrics are also called Hessian cloth, and jute sacks are called Gunny

Bags in some European countries. The fabric made from jute is popularly known as Burlap in

North America. In Spanish, jute is called Yute and jute fabrics are called Arpillera.

INTRODUCTION

• The Jute industry occupies an important place in the national economy of India. It is one of the major industries in the eastern region, particularly in West Bengal

• Jute, the golden fibre, meets all the standards for ‘safe’ packaging in view of being a natural, renewable, biodegradable and eco-friendly product

• It is estimated that the jute industry provides direct employment to 0.37 million workers in organized mills and in diversified units including tertiary sector and allied activities and supports the livelihood of around 4.0 million farm families

• In addition there are a large number of persons engaged in the trade of jute

JUTE PROCESSING

SOWING:- To grow jute, farmers scatter the seeds on cultivated soil. When the plants are about 15–20 cm tall, they are thinned out. About four months after planting, harvesting begins. The plants are usually harvested after they flower, before the flowers go to seed. The stalks are cut off close to the ground. 

RETTING:- Retting is the process of extracting fiber from the long lasting life stem or bast of the bast fiber plants. The available retting processes are: mechanical retting (hammering), chemical retting (boiling & applying chemicals), steam/vapor/dew retting, and water or microbial retting. Among them, the water or microbial retting is a century old but the most popular process in extracting fine bast fibers. However, selection of these retting processes depends on the availability of water and the cost of retting process.

EXTRACTION OF FIBRE:- To extract fine fibers from jute plant, a small stalk is harvested for pre-retting. Usually, this small stalk is brought before 2 weeks of harvesting time. If the fiber can easily be removed from the Jute hurd or core, then the crop is ready for harvesting.

SCUTCHING:- To separate the valuable fibers of (flax, for example) from the woody parts by beating. The same procedure is followed in jute also.

JUTE MILLS IN INDIA

• There are 84 composite jute mills in India

– 6 mills are under Government of India’s P.S.U.

– 1 mill (Tripura) is under State Government

– 2 mills (Assam Co-op. & New Central) are in the Co-operative sector

– 71 are privately owned mills

LOOMS & SPINDLES IN INDIA

• As on 01-01-2012, total number of looms installed in jute industry stood at 49,529

• The installed spindles in jute mills were 7,60,304

IMPORTANCE

• Raw jute crop is an important cash crop to the farmers.

• Cultivation of raw jute crop provides not only fibre which has industrial use, but jute stick which is used as fuel and building material by the farming community.

• Raw jute is produced mainly in the state of West Bengal, Bihar, Assam, Orissa, Andhra Pradesh, Tripura and Meghalaya.

JUTE PRODUCTS

Mats and Carpets Sofa Set and Beds Decorative wall hangings Hammock Chappals Designer Foot Wears Brief Cases Purses and wallets Hand Bags

Ladies Bags Shopping Bags

JUTE PRODUCT EXPORTS

50%47%

1% 1% 1% 0%

2010-11

Floor CoveringsHand & Shopping BagsWall HangingsGift ArticlesDecorative FabricsOthers

IMPORT EXPORT

2008-09 2009-10

2010-11 2011-12 2012-13

(A)Supply

(i)Opening Stock 22 8 12 22.5 31

(ii)Jute Crop 82 90 100 102.5 93

(iii)Import 2 3 7.5 9 8

Total 106 101 119.5 134 132

(B)Distribution

(i)Mill Consumption 89 77 87 92 95

(ii)Domestic/Industrial Consumption

9 10 10 10 10

(iii)Export Neg 2 Nil 1 Nil

Total 98 89 97 103 105

(C)Closing Stock 8 12 22.5 31 27

STATE WISE PRODUCTION

          (in ‘000 bales)

States 2008-09 2009-10 2010-11 2011-12   2012-13

Andhra Pradesh 295 191.9 224 228   225

Assam 674.3 735.5 650.7 795   823

Bihar 1220.1 1277.7 1310.4 1930   1690

Meghalaya 54.6 53.1 52.6 86   86.31

Nagaland 7.2 11.1 5.4 0   40.2

Orissa 114.7 112 113.5 193   177.7

Tripura 8.7 9.4 10.7 9   11

West Bengal 7965.5 9400.1 8214.3 8800   8349

Others 31.1 35.7 38.6 96   4.5

TOTAL 10371.2 11826.5 10620.2 12137   11406.71

% Change over   0.14 -0.1 0.14   -0.06

the previous            

year            

FINANCIALS

Particulars 2010-11 2011-12

Quantitative (Bales/Lakh): 

Procurement of Raw Jute 0.34 1.16

Sales of Raw Jute 0.10 1.34

Closing Stock 0.26 0.47

Financial (Rs./Lakh)

Sale of Raw Jute 566.08 5599.39

Sales jute seed 625.09 546.42

Adjusted cumulative Profit after regulation

Of subsidy as per Cabinet decision

4791.44

 

5813.39

 

PROCUREMENT & SALES

0.34 0.1 0.26

1.16 1.34

0.47

2010-11 2011-12

JUTE PRODUCTION

WORLD TOTAL JUTE PRODUCTION

PRODUCTION RANK OF INDIA

Rank Country Production (In $1000)

1 India 7,08,776

2 Bangladesh 2,98,432

3 China 25,367

4 Myanmar 9,762

5 Uzbekistan 7,461

6 Nepal 6,588

7 Vietnam 5,596

8 Thailand 1,865

9 Sudan 1,250

10 Egypt 821

COMPARISON WITH OTHER COUNTRIES

NATIONAL JUTE BOARD

• National Jute Board Is Under Ministry of Textiles.

• The Ministry of Textiles is responsible for policy formulation, planning, development export promotion and trade regulation  in respect of the textile sector.

• It included all natural and manmade cellulosic fibres that go into the making of textile, clothing and handicrafts.

• The developmental activities of the Ministry are oriented towards making adequate quantities of raw material available to all sectors of the textile industry and augmenting the production of fabrics at reasonable prices from the organised and decentralised sectors of the industry.

Composition of the NJB (As per National Jute Board Act, 2008) :

The Secretary in charge of the ministry of the Central Government dealing with   textiles, who shall be the ex-officio Chairperson of the Board.

Three Members of Parliament of whom two shall be elected from among  themselves by the members of the House of the people and one     from among themselves by the members of the Council of States.

The Additional Secretary and Financial Adviser, Ministry of Textiles, Government  of India, ex-officio.

The Joint Secretary (Jute) in the Ministry of Textiles, Government of India, ex-  officio. Two members of the rank of Joint Secretary to be nominated by the Central  Government to represent

respectively the ministries of the Central Government dealing with –                            (i) Agriculture and                            (ii) Food and public distribution ;

Three members to be nominated by the Central Government by rotation in the  alphabetical order to represent respectively the Governments of the States of Andhra Pradesh, Assam, Bihar, Meghalaya, Orissa, Tripura and West Bengal; thenomination shall be from officials of the State Government holding the rank of Secretary to the State Government and dealing with Jute or Textile matters.

Three members of jute farmers of which one from State of West Bengal and two  from other States on rotational basis to be nominated by the Central Government.

Three members of jute workers of which one from State of West Bengal and two from other States nominated by the Central Government on rotational basis.

Two experts from the field of jute technology and related field to be nominated by the Central Government.

Two members from the "micro enterprises", "small enterprises" and "medium enterprises" dealing in jute industry to be nominated by the Central Government.

Two members to be appointed by the Central Government to represent the jute industry in the organized sector.

Two members to be appointed by the Central Government to represent the jute industry in the decentralized sector.

Two members to be appointed by the Central Government to represent the  exporters of jute products. The Director, Indian Jute Industries Research Association, ex-officio. The Principal, Institute of Jute Technology, ex-officio. The Director, National Institute of Research on Jute and Allied Fibre Technology,  Kolkata, ex-

officio. The Director, Central Research Institute for Jute and Allied Fibres, ex-officio. The Chairman and Managing Director, Jute Corporation of India, ex-officio. The Jute Commissioner, ex-officio. The Secretary, National Jute Board, who shall be the ex-officio Member- Secretary of the Board.

ABOUT MINISTRY

The principal functional areas of the Ministry cover the following:-

•     Textile Policy & Coordination 

•      Man-made Fibre/ Filament Yarn Industry 

•      Cotton Textile Industry 

•      Jute Industry 

•      Silk and Silk Textile Industry 

•      Wool & Woollen Industry 

•      Decentralised Power loom Sector 

•      Export Promotion 

•      Planning & Economic Analysis 

•      Integrated Finance Matters 

Indian Organisations for Development of Jute

Organisation Main Activities 

Office of Jute Commissioner To advise Government the jute industry and trade on all matters relating to the development of jute industry and to implement the Government policies.

Indian Jute Mills Association The representative body of the Indian jute industry.

Indian Jute Industries' Research Association

Research and Development wing in Jute

National Jute Manufactures Corporation Ltd.

Apex body for management of all nationalised jute mills.

Calcutta Jute Fabrics Shippers Association

The representative body of the Indian Shippers of jute goods.

The Directorate of Jute Development

To look after the development of raw jute cultivation and application of scientific methods of cultivation both at micro and macro levels.

Central Research Institute for Jute & Allied Fibre

Engaged in genetic research and development of raw jute

National Institute of Research on Jute and Allied FibreTechnology

Engaged in various technological researches on jute and other long vegetable fibres.

Department of Fibre Technology

Institute of Jute Technology Premier institution running jute technology course.

Forward Markets Commission To look after the forward and future trading in raw jute and

jute goods.

The East India Jute & Hessian Exchange Ltd.

Recognised association to regulate forward trading in raw jute and jute goods

The Jute Corporation of India Ltd.

To ensure minimum support price to the jute growers and to act as raw jute price stabilising agency.

The Jute Balers' Association

And Gunny Trades Association

Recognised association for trading in raw jute.

Major Issues of Buyers That Need To Be Addressed

• High & unstable prices

• Lack of marketing efforts / Lack of information about Indian suppliers / jute products

• Poor service levels / Lack of relationship building by suppliers

• Unsatisfactory or inconsistent quality

• Limited designs & product variety

• Technical limitations of jute usage

• Supply chain is not streamlined resulting in high lead times and inefficiencies

• High duty and taxes / Tariff and non tariff barriers in specific markets

• Inaccessibility to jute related data (e.g. prices etc.)

Product Standardization

• Currently a wide range of product specifications are being manufactured for various jute products.

• Results in lack of planning of production, resulting in manufacturing delays.

• Also lack of standard specifications makes it difficult to control quality standards of finished goods in all cases (except for exporters who are quality conscious and buyers who demand quality certifications)

Quality assurance testing & certification

• Product quality needs to be improved through adherence to quality standards and constant innovations.

• Once standard specifications for product are established, certification for the same should be given by an independent certification agency for all export shipments in order to maintain quality standards and assurance for buyers.

NJB has already undertaken steps to address the following recommendations:

• Formation of PPP based "export body" for JDPs under NJB

• Product standardization

• Organize Stake holder Education Program

• Open Marketing / liaison offices in key locations

• Open warehouse for JDPs at select markets

• Develop Online information portal

• Developing brand India for Jute products

• Promotional activities like organizing road shows, workshops, trade fair participation etc.