Raw jute supply hit due to demonetisation

The demonetisation of high currency notes has adversely affected the jute sector as it took many jobs besides hitting supply of the commodity, an industry member said.

The demonetisation of Rs 500 and Rs 1,000 notes has hit the arrival of raw jute, resulting in productivity and job loss. It also became a reason for the rise in the prices of the feedstock.

“Due to demonetisation, transaction in raw jute has nearly stopped. Farmers are not willing to sell their crop without new currency notes and traders are not lifting raw jute,” a jute trader said.

Following the ban on high value notes from November 9, supply of raw jute has fallen drastically and so far there has been a fall of 15 per cent compared to normal months.

“The gap is widening day by day and needs government intervention,” a mill owner said declining to be quoted.

The Indian Jute Mills Association has written to Jute Commissioner and West Bengal labour minister seeking their intervention.

IJMA and jute sector wants JCI should intensify their commercial procurement from the market 

to overcome the problem,fearing a recurrence of the 2005 crisis.

The body has suggested that the role JCI played in 2005 should be repeated to protect the jute industry before problem spirals.

Sources said JCI has so far procured 1.8 lakh bales, but it should be to the tune of 6-7 lakh bales for comfortable supply of raw jute to the mills that employs lakhs of workers.

Hoarding threat cannot be ruled out if this problem continues for long. Hoarding of raw jute was 

rampant last year causing damage to industry and higher subsidy for the government toward procuring sackings.