Export earnings from jute have fallen significantly due to devaluation of the dollar in the global market, a trade war between China and the US, and the absence of a strategic marketing strategy, according to industry insiders. They fell by 26.66 per cent from July to December in FY2018–19
According to the Export Promotion Bureau (EPB), jute and jute goods fetched export earnings of USD 421.02 million in FY2018–19, up from USD 574.05 million recorded for the same period in FY2017-18. This marks a negative growth of 26.66 per cent.
Expressing the reasons behind such negative growth, Lutfur Rahaman, senior vice-chairman of the Bangladesh Jute Goods Exporters Association, said: "African countries used to import huge quantities of jute bags from us. But were losing the market due to the high import duty of 15 per cent."
Describing another reason, Rahaman said: “In the global market, local currencies are depreciating against the dollar. But the taka is getting stronger against the dollar. So, we fell short in terms of exporting goods compared to our competitor countries.”
Talking to The Independent, Enamul Haque Patwary, former president of the Bangladesh Jute Goods Exporters Association, said: “Devaluation of the dollar in the global market has been the prime reason behind this negative growth of jute export in our country.”
“A trade war between China and the US is also not helping us,” he added.
Patwary, who is also managing director of the Jute and Bags Export Corporation, said: “Our company used to export jute goods worth USD 300,000–400,000 a year. Now, it has come down to almost zero."
Other jute-importer countries like Russia, Turkey and Egypt are also placing less orders because of the currency depreciation, he noted.
The export of raw jute has also registered a negative growth of 20.88 per cent.
It fetched USD 65.49 million in FY2018-19 as against USD 82.77 million in FY2017-18.
“Local jute prices are better than the export price. So, we get better prices by selling raw jute locally rather than exporting it,” said Patwary.
Describing another reason, Rahaman said, “The export of jute goods to India has been affected due to imposition of anti-dumping duties on natural fibre-based products from Bangladesh.”
When asked how to get rid out of such negative growth, Rahaman said the government should ink a bilateral trade policy support agreement with other countries to reduce the import duty. Also, Generalized System of Preferences (GSP) facilities should be given in this sector in order to increase the export performance.
“A strategic marketing plan for promotion of jute and jute products in the global market is essential for us at this moment,” he added.