Economy

Amiti Sen | New Delhi, May 15 | Updated on: May 15, 2022

Calcutta High Court had ruled that Jute Commissioner should take steps to ensure mills get raw material at notified rate, or review prices

The Jute Commissioner is planning to meet all stakeholders, including industry representatives and officials from the Jute Corporation of India and the West Bengal government, to discuss the contentious issue of fixing jute prices as per directions of the Calcutta High Court, according to the Textile Ministry. 

“The Jute Commissioner needs to take into consideration the freight, transportation, handling, and storage charges of jute to decide if there is a need to re-fix prices. Stakeholders need to be consulted to arrive at any decision on the matter,” an official tracking the matter told BusinessLine.

The Court, on May 11, directed the Jute Commissioner, who operates under the Textile Ministry and is in charge of regulating the jute sector, to take steps so that mills can get the raw material at the notified rate of ₹6,500 per quintal, but review the price if it cannot be adhered to.

The Indian Jute Mills Association had moved the Calcutta High Court against the fixing of the ceiling rate for raw jute at ₹6,500 per quintal by the Jute Commissioner in September 2021. Its main argument has been that the ceiling rate was too low and a similar grade of jute was available at over ₹7,000 per quintal in the market.

Millers paying more for raw jute

Industry sources contend that a lower ceiling price for raw jute on paper hurts the millers which produce jute bags as the government would consider the raw jute price while calculating jute bag prices that it buys from the mills, while actually millers are paying much more for it.

As a result, some mills in the State had shutdown work and production of jute bags had plummeted.

“No farmer or farmer bodies have either orally or in writing lodged a single protest/objection on account of raw jute price fixation till now,” the official pointed out.

Taking cognisance of the situation, the Calcutta High Court directed the Jute Commissioner to take positive steps and adopt stringent measures to implement the notified rate. But despite all efforts, if it appeared that the notified rate cannot be adhered to, then the Jute Commissioner has been asked to review and re-fix the rate taking into consideration the relevant factors.

It also observed that as there is abundant crop, the price of raw jute should have come down, but since it had not, it indicated that something was wrong somewhere. West Bengal is estimated to produce close to 85-90 lakh bales of raw jute in 2021-22, compared to 55-58 lakh bales in 2020-21.

“Since the Jute Commissioner has been directed by the High Court to collect first-hand information on the rate at which jute is available to the mill owners and also take into consideration freight, transportation, handling and storage charges before taking a call on the need to re-fix price ceilings, the meeting with stakeholders will help in getting the inputs,” the source said.

Published on May 15, 2022