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Raw jute prices to drop further on higher crop, poor quality

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Raw jute prices have fallen since the beginning of the harvest season due to increased production and a relative decline in crop quality. The price is now at Rs 6,000 per quintal, down nearly 17% compared to Rs 7,200 per quintal for the same period last year. The price has fallen by almost 3% in the last two months compared to Rs 6,200 per quintal at the end of July.

According to Raghav Gupta, president of the Indian Jute Mills Association, raw jute production has been strong this year and prices are dropping. Easy availability of fiber at current prices will allow all factories to operate smoothly and meet the demands of packaging and other industries. This contrasts with the situation over the past two years, when a shortage of fiber supplies affected mill operations and at least 5 to 10 mills remained closed.

Raw jute production is estimated to be close to 950,000 bales in 2022-23 compared to 900,000 bales in 2021-22, an increase of around 6-7%. Carry-over stock is estimated to be close to 19 million bales, compared with about 5 million last year. Total raw jute availability is therefore estimated at nearly 11.4 million bales, compared with his 9.5 million bales last year.

“TD-5 grade jute is currently trading at around Rs 6,000 per quintal compared to Rs 7,200 during the same period last year. It’s a little late, but we expect it to pick up after November once the rabbi procurement season starts,” Gupta said. business line.

Affected crop quality

Jute cultivation in the country is mainly concentrated in the three states of West Bengal, Bihar and Assam. Bengal accounts for almost 80% of the area under jute and his 83% of its production, Assam has nearly 8% of his production share, and Bihar accounts for the rest.

Over the past two years, raw jute prices have been very high, prompting farmers to sow more seeds this year, covering nearly 800,000 hectares. However, bad weather conditions in jute growing areas in his June and his July with flooding in North Bengal and Assam and reduced rainfall in South Bengal affected the wet season. This affected the quality of the crop and thereby the price.

The price difference between low-quality jute and average-quality jute has become much steeper as quality is affected, said an industry insider. It is close to 250-300 rupees, but this time it is very big, close to 800-1000 rupees per quintal,” he said.

The industry expects further price declines in the future. “The market has been sluggish since the beginning of the harvest season and we cannot rule out the possibility of further price declines,” Gupta said.

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