Farmers, Mills Raise Concerns as West Bengal Raw Jute Prices Plunge 50%

Raw jute prices in West Bengal have witnessed a sharp decline of nearly 50 per cent since early July, triggering concerns among farmers, jute mills and industry stakeholders over the accuracy of the market price discovery mechanism used for government procurement of jute packaging materials.

According to price bulletins issued by the Jute Balers' Association (JBA), the benchmark rate for TD-5 grade raw jute (South Bengal) dropped from ₹18,300 per quintal on July 9 to ₹9,100 per quintal on August 1. The fall of more than ₹9,000 within three weeks has raised questions over the factors driving the sudden correction.

Industry veteran and former Indian Jute Mills Association (IJMA) chairman Sanjay Kajaria described the price movement as unusual and called for a transaction-based investigation to examine how market rates changed despite limited arrivals of the new crop.

“This is an extraordinary crash that raises serious questions before farmers, jute mills and the government’s packaging system,” Kajaria said, adding that the industry needed greater transparency in understanding the price movement.

The IJMA has also raised objections over the daily quotations published by the JBA, claiming they do not accurately reflect actual market transactions. In a letter to JBA chairman Madan Gopal Maheshwari on July 14, IJMA alleged that mills were often paying higher prices for ready delivery contracts than the published quotations, while still facing supply shortages.

The association highlighted that JBA quotations are used by the Jute Commissioner’s Office as a key reference for determining the raw jute cost component while fixing the monthly fair price of government jute gunny bags. Since raw jute accounts for nearly two-thirds of manufacturing costs, any distortion in quotations could impact the credibility of the pricing mechanism.

Responding to the concerns, JBA chairman Maheshwari defended the existing system, stating that its five-member quotations committee collects rates from participating mills every working day and evaluates them on a comparable basis. He said quotations involving non-standard delivery or payment terms are excluded and that the methodology has been consistently followed over the years.