Proposal to dilute mandatory jute packaging; industry concerned

New Delhi, Sept 8  The jute industry has raised concern over the government’s proposal to dilute the mandatory jute packaging order under the Jute Packaging Material Act (JPMA), 1987.

The legislation provides for 100 per cent reservation for jute bags for packing food grains and sugar by government procurement agencies.

According to a media report, the Union Textile Ministry has favoured a minimum reservation of 90 per cent for food grains and 20 per cent for sugar during 2014-15 for jute packaging, a move if implemented could spell Rs 4000 crore loss for the industry.

In 2013-14, the Centre had fixed mandatory packaging in jute bags at 90 per cent for food grains and 20 per cent for sugar.

According to Business Standard quoting Sanjay Kajaria, a leading jute mill owner and former chairman of Indian Jute Mills Association (IJMA), “The dilution of the order prescribed by the ministry would deprive the jute industry of a market worth Rs 4000 crore. The ministry is proposing dilution even though the industry has sufficient capacity to meet the demands of government procurement agencies.”

The dilution move will decrease the dependence of jute mills on sacking and make them to go for product diversification.

The huge dilution in sugar has been proposed since jute bags are not preferred by the user agencies due to reasons such as contaminants like jute fibre, jute batching oil, moisture pick up, mildew and leakage of sugar.

The textiles ministry has assessed the total kharif season requirement of jute bags for packing food grains at around 1.39 million bales (or 465,000 tonne).

The total government requirement for jute bags has been pegged at approximately 2.39 million bales, the media report added.