The Telegraph
Saturday , October 13 , 2012
Since 1st March, 1999
CIMA Gallary

Jute to feel the heat

New Delhi, Oct. 12: The Rangarajan panel’s proposal to scrap the mandatory packing of sugar in jute bags goes against the interest of Bengal’s jute mills.

“The sugar industry should be removed from the purview of the Jute Packaging Material Act. If the use of jute is uneconomical, such a mandatory use of the regime is unlikely to render the jute industry profitable,” the report said.

According to Rangarajan, the use of jute bags increases the cost of sugar by about 40 paise per kg.

The panel said “this puts additional financial burden on the industry and also limits its ability to utilise new packing materials”.

“The recommendations of the Rangarajan committee will result in a savings of about Rs 1,000 crore to the sector,” Abinash Verma, director-general of the Indian Sugar Mills Association, said.

However, Manish Poddar, chairman of the Indian Jute Mills Association, said the mandatory jute bag procurement act was being “violated blatantly by private and co-operative sugar mills.”

For the Rs 8,000-crore jute industry, sugar mills are marginal buyers of the bag with a market share of less than 10 per cent.

Moreover, with the norms being already flouted, the immediate impact will be marginal, Poddar said.