Introduction :

Jute is a natural fibre popularly known as the golden fibre. It is one of the cheapest and the strongest of all natural fibres and considered as fibre of the future. It is a long, soft, shiny fibre that can be spun into coarse, strong threads.  Jute plant is generally 6 to 12 feet in length.  The jute plant's fibres lie beneath the bank and surround the woody central part of the steam. Jute is second only to cotton in world's production of textile fibres.

In India 4000,000 families are involved in the cultivation of raw jute.  There are 76 jute mills in India and about 4 million families are dependent on cultivation of Jute and Mesta and about 2 lakh workers get direct employment in the Jute industry.  Several thousand other people are engaged in several jute related diversified goods.  India is also self sufficient in the jute seed production.  More than 90 percent of seeds are produced by the state seed corporation of Andhra Pradesh and Maharashtra.

The first Jute Mill was established at Rishra, on the River Hooghly near Kolkata, in 1855 by Mr. gerge Acland.  Mr. George Acland brought jute spinning machinery from Dundee (U.K).

Growing Area :
India, Bangladesh, China and Thailand are the leading producers of Jute.  It is also produced in southwest Asia and Brazil.  India is the world's largest producer of raw jute and jute goods followed by Bangladesh, contributing approximately 66% percent and 30% respectively of global production. The jute fibre is also known as Pat, Kosta, Nalita, Bimli or Mesta.

India is the largest producer of jute goods in the world, while Bangladesh is the largest cultivator of raw jute.  The cultivation of Jute in India is mainly confined to the eastern region states - West Bengal, Bihar, Assam, Tripura, Meghalaya, Orrissa and Uttar Pradesh.  Nearly 50 percent of total raw jute production in India alone figures in West Bengal. 

Variety of Raw Jute:
The two main types of jute, white jute (Corchorus Capsularies)and dark jute or tossa (Corchorus Olitorius) are  grown in India, Bangladesh, Thailand, China, south Asian countries and Brazil. 

Jute (Corchorus capsularis & Corchorus olitorius), Kenaf (Hibiscus cannabinus) and Roselle (H. sabdariffa var (Altissima) are vegetable bast fibre plants next to cotton in importance. In the trade there are usually two names of jute, White and Tossa. Corchorus capsularis is called White Jute and Corchorus olitorius is called Tossa Jute. White and Tossa Jute fibres are finer and stronger than Mesta and are, therefore, better in quality. Kenaf known as Mesta or Ambari (Hibiscus Cannabinus) is also considered as a variety of Jute.  It is cultivated in Indian subcontinent, Thailand, China and Africa.  Mesta is a coarser, more fragile fibre, and is used by the jute mills in admixture with jute to obtain certain desired properties.

Growing Season & Fibre Extraction :

Jute is a rainy season crop, sown from March to May according to rainfall and type of land.  It is harvested from June to September depending upon whether the sowings are early or late.  

The Fibre Extraction č

The jute plant's fibres lie beneath the bark and   surrounded the woody central part of the stem.  To extract the fibres from the stem, the process is carried out in the following stages as Retting, stripping, washing, sun drying and bailing.

                        

Retting is a process in which the tied bundles of jute stalks are taken to the tank by which fibres get loosened and separated from the woody stalk.  The bundles are steeped in water at least 60 cm to 100 cm depth.  The retting process is completed in 8 to 30 days, when the barks separate out easily from the stick or wood and the fibres are ready for extraction.  A development in recent years is adoption of ribbon retting technology in jute growing trade of the country.

Stripping is the process of removing the fibres from the stalk after the completion of retting. 

Extracted fibres are washed in clean water.  The dark colour of fibres can be removed by dipping them in tamarind water for 15 to 20 minutes and again washed in clean water.  After squeezing excess water the fibres are hang on bamboo railing for sun drying for 2-3 days.

The jute fibre is then graded into tops, middles, B, C and X-bottoms. They are transported to jute market or direct to jute mills.

Grading of Jute :

Extracted fibres from plants are then commercially assorted and graded for trading.  Raw jute is classified according to quality of jute and its application.  The fine quality white raw jute is graded as W1, W2, W3, -- to W8.  The Tossa raw jute is graded from TD1, TD2, -- to TD8.  Mesta raw jute is grades as Mesta Top, Mesta Mid, and Mesta Bottom etc.

Jute fibres after extraction is graded as:
          Top - Very strong fibres, good lustre and colour.
          Middle - Strong fibre and average colour and lustre.
          Bottom - Sound fibre, medium strength.
          B-Bottom - Sound fibre, medium strength, not suitable for higher grades.
          C-Bottom - Medium strength fibre, any colour.
          X-Bottom - Weak ha jute.
          (Cross-Bottom)

Raw jute is further classified for trading and for manufacture into jute products on jute mills on the bases of length, strength, fineness, lustre and colour.

White jute is available in the following 8 grades as:
W-1, W-2, W-3, W-4, W-5, W-6, W-7, W-8. 

Tossa jute is available in 8 grades as:
TD-1, TD-2, TD-3, TD-4, TD-5, TD-6, TD-7, TD-8

Mesta jute is available in 6 grades - quality wise
M-1, M-2, M-3, M-4, M-5, M-6

Other gradation of raw jute for trading region wise are as follows :
          Assam - Assam -1 to Assam - 8
          Jungli : Jungli - 1 to Jungli - 8
          Bimali : Bimali -1 to Bimali - 8

Production :
Jute production in India has increased from 3.31 Million Bales of 180 Kgs in each in 1950-51 to 10.78 Million Bales of 180 Kgs in each in 2002-03. Where as, area under jute production coverage does not increased so much. It was 0.57 Million Hectors in 1951-52 and to some extent increased to 1.04 Million Hectors in 2002-03.

Production of jute since last 8-9 years have stagnated at comparatively higher level due to fall in domestic as well as export demand for this ‘Golden Fibre’, which can be attributed to cheaper substitution of plastic bags and also importer’s resistance terming it as hazardous for sea voyage. It has also reported that trade did not pay due attention and significance in modernizing the technology and thus allow the industry to die slowly. This has a major impact on the growers. Jute prices became highly volatile at times when shortage appears due to drought conditions and prices crumbled when monsoon performed satisfactorily. This situation necessitated Government Intervention as a stabilizing agency to protect the grower’s interest through MSP & procurement mechanism.

Production of raw jute might have varied year after year in the backdrop of prevailing monsoon scenario in the respective year. But consumption has increased at an average rate of 1.42% from 1996-97 to 2001-02. Overall consumption of raw jute has increased from 82.9 lakh bales in 1996-97 to 91.42 lakh bales in 2001-02. Since jute is a natural fibre and its use in apparel industry is gaining momentum world over, its consumption is forecasted to gain high leap in the coming years. 

Imports & Exports :

Export market of jute goods has displayed a notable turnaround recently. Since the year 1995-96 the highest export of Jute goods took place during 2003-04 because a number of innovative steps have been taken by the Government of India for giving a boost to exports. Major exportable items are Hessian and Sacking.

The USA, Ghana, Belgium, Egypt, and Turkey were the five major countries accounting for 44% of total export value of jute goods. However, the rising trend in exports of jute goods could not be maintained during the financial year, and during 2004-05 (April-January) exports stood at 172.5 M.T. This decline is mainly attributable to the downward revision in Duty Entitlement Pass Book (D.E.P.B.) rates on major exportable items, and appreciation of Indian Rupee vis-ŕ-vis US Dollar.

Though India is the largest producer of raw jute in the world, Bangladesh produces the best quality fibre. On an average, India imports around 3 to 5 lakh bales of raw jute from Bangladesh every year. Total import of Raw Jute and Jute goods remain 86 to 142 thousand MT. The import of Raw Jute was highest in the year 2002-03 i.e. 7.4 Lakh bales and it remained 6 lakh bales in the consecutive year also. But in the year 2004-05 the composition of import has changed, raw jute has shown a reverse trend and import of Jute goods increased. 

Government Policy :

Since millions of people are directly and indirectly dependent on jute cultivation, its processing and manufacturing of jute related goods, central govt. has taken firm initiatives to strengthen this sector. Moreover, increasing use of cheap but hazardous plastic has also drawn attention of the environment friendly organizations. The Government provided necessary support to the sector in the form of compulsory use of jute packaging materials for certain commodities.  This has helped the jute industry to stabilise and has also ensured a better return to the jute farmers.

Government of India is also supporting the jute farmers through minimum support price (MSP) operations and raw jute procurement. Raw jute, procured by JCI under the minimum price support operation in the interest of growers, costs more than the open market price. JCI’s efforts are only to ensure that farmers are not forced to sell raw jute below the minimum support price. MSP of jute (TD-5) has increased from Rs. 570 in 1997-98 to Rs. 860 in 2003-04. All these activity reflect positive attitude of govt. towards jute growers and jute industry overall.

Marketing Channels of Jute in India :

Graded fibers packed in Bales of 150 kg each.  They send to jute mills for processing to make Jute Yarn, Hessian cloth, sacking clothes, Bags, Carpet, Twine and other useful clothes.  

Why futures trade in Raw Jute necessitated č

Futures trading in Raw Jute and Jute Goods began in Calcutta with the establishment of the Calcutta Hessian Exchange Ltd., in 1919. Later East Indian Jute Association Ltd. was set up in 1927 for organizing futures trading in Raw Jute. These two associations amalgamated in 1945 to form the present East India Jute & Hessian Ltd., to conduct organized trading in both Raw Jute and Jute goods.

Futures trading in raw jute suspended in 1964. The suspension was together with the policy of the Central and State Governments. The announcement to reintroduce it was made in February 2003 after the Union Government had pressed for its return. However, till date, none except the implementing agency, East India Jute & Hessian Exchange Ltd (EIJHE), and its representatives, are inspired about the whole concept. Currently, the exchange conducts futures trading in Hessian and jute goods.

Old times say raw jute futures were suspended on the insistence of the then State Government (WB Govt.). There were too many reports and allegations of price manipulations which left the farmer in the lurch. The Government had no other way but to suspend it. But now situation has changed. Through Online Futures trading with demutualised set up, which has more transparency, we can hope that proper futures trading will take place in Raw Jute in India now.

The Jute Sector has been playing an important role in the economy of important role in the economy of eastern region. About 4 million families are dependent on cultivation of Jute and Mesta and about 2 lakh workers get direct employment in the jute industry. Raw Jute is an agricultural produce, it is exposed to price instability owing to bumper & short crops. Two successive bumper crops of raw jute including Mesta during the year 2001-02 and 2002-03 have a dampening impact on the raw jute market. In the backdrop of surplus supply of raw jute, the lower demand from jute mills has made raw jute prices lower touching the Minimum Support Price level. This clearly shows that Indian Jute farmers do not get remunerative prices and here futures trading in Raw Jute would only help market forces pull down prices further through its price discovery mechanism. When there is a bumper crop, hedging will prevent prices from dropping and thereby benefit the farmers and also in the event of a shortage in supply, the prices would be moderated to protect mill owners. It is expected that futures trading in raw jute is essentially aimed at creating a bridge between farmers and industry. Therefore a handful mill owner can’t further control/dictate jute price in India. Its effect will percolate among the 4 million farmers growing the golden fibre.

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