Calcutta, Jan. 30: The Jute Corporation’s (JCI) decision to stop buying raw jute due to space problems has sent jute prices plummeting much below the minimum support level at the rural hats.
The corporation has a current stock of around eight lakh bales.
According to market sources, the Assam bottom fibre is ruling around Rs 750 per quintal, a good Rs 100 lower than the MSP fixed by the government for jute grown in the region.
When contacted, jute commissioner S. Majumdar said the corporation has ‘slowed down’ procurement.
“Almost 75 per cent of the current year’s produce estimated at one million bales had arrived in the market during July-December. Farmers who had stocked the fibre in expectation of a higher price are now facing a distress sale situation,’’ Majumdar said.
The jute mills on the other hand are busy fulfilling sacking requirements for the Rabi crop. The industry has to supply 6.8 lakh bales of sacking within March 31 to the Food Corporation of India and the state governments of Punjab and Uttar Pradesh. Orders from other state government procurement agencies are also expected.
The jute commissioner has issued orders making it mandatory that the mills carry out the government supply schedule on a priority basis. Rabi procurement officially begins on April 1.
“Suitable action will be taken if a mill fails to fulfil supply obligations and instead feeds the open market for better prices, Majumdar said.
Meanwhile, sacking is ruling around Rs 2,080 in the local gunny market and the operators are hoping a firm trend to continue for the next two to three months.