India's jute industry is facing a severe crisis due to inadequate rainfall during the 2010-11 monsoon season, which is expected to reduce raw jute production by 15-20% compared to the target of 1.07 million bales. Industry experts predict that this year’s output could fall short by as much as 100 to 1.5 million bales, causing major disruptions in the supply chain.
The country is currently experiencing a critical shortage of jute, with most jute mills only able to maintain two days’ worth of inventory. In key production regions, water scarcity has led to a near 50% drop in manufacturing capacity, further exacerbating the situation.
The Indian Jute Manufacturers' Association (IJMA) has issued urgent warnings to its members, as declining raw jute supplies threaten to force some factories to shut down. This could lead to widespread unemployment and potential labor unrest. Meanwhile, the price of raw jute has surged dramatically—rising by Rs. 700 per bale, or about 35% above normal levels. The West Bengal variety TD-4 is now selling for Rs. 3,100 per bale, reflecting the growing pressure on the market.
Approximately four million farmers cultivate jute across around 80,000 hectares, often intercropping it with rice. However, over the past few years, the area under jute cultivation has shrunk by 300,000 hectares as farmers shift to more profitable crops like rapeseed and vegetables. Despite government efforts to boost jute prices through minimum support price policies, these measures have failed to rekindle farmer interest in the crop.
With supply struggling to meet demand and prices continuing to climb, the jute sector is at a crossroads. Without immediate intervention, the long-term sustainability of India’s jute industry remains uncertain.
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