Jute Price Analysis :  Bangladesh & India



Demand for jute is inelastic for which a reduction in price will not bring a proportionate increase in its consumption. As a result total income of growers from jute as well as prices of jute falls if supply is increased. Bangladesh is the largest exporter of raw jute, and India is the largest producer and consumer of jute products in the world. Therefore, the local price of raw jute in Bangladesh is deemed the international price. Also the local price of jute products in India is considered to be the international price.

Monthly Raw Jute Price Movement in Bangladesh

Table 1 and figure 1 show that, raw jute price in Bangladesh showed an increasing trend from March- 13 to May- 13. The price was remain unchanged from May- 13 to July- 13. After increasing a bit in August- 13, the price again remained almost the same from September- 13 to February- 14. Effect of exchange rate is ignored here, unless raw jute price is being stable from January- 13 till now. However, the long term price stability does not reflect the actual scenario of its market price.



Monthly Raw Jute Price Movement in India

Considering the data collected from the Jute Baler's Association of India, the monthly retted raw jute price was higher in April- 13 than March- 13. It was in declining trend from May-13 to August- 13. After that, raw jute price was again in increasing trend till October- 13. Price of raw jute got a bit decreased in November- 13, again a little high in December- 13, a little low at January- 14 and again a bit increased in February- 14 (Table- 2 and Figure- 2). In May-June due to old stock clearing and in November-December new jute appears in the market leads to regular price decline of raw jute in India.


Yearly average raw Jute export price movement in Bangladesh

The export price of raw jute (retted, tow and waste) in Bangladesh was in increasing trend during 2005-2010 with an exception in 2007, but the prices declined sharply during 2011-2012 (Table-3 and Figure-3). This is because in the last year the local traders and industries of Bangladesh faced a fund crisis for jute procurement which might in turn pulled down the jute prices in local market as well as in export market. However, considering the average price growth during 2005-2008 and 2009-2012, it can be projected that the raw jute price may increase by 13.72% and reach at around USD 537 per Tonne by 2016.

Average Market Price & Minimum Support Price of raw Jute in India

Every year, the Government of India determines the Minimum Support Prices of various grades of raw jute based on the recommendations of the Commission for Agricultural Cost and Prices (CACP) since the season 1966-67 (July-June). During the reported period (season 2006-07 to 2012-13) the MSP of raw jute increased steadily.


The market price of TD-5 grade raw jute (a tossa variety grown in Assam) was in increasing trend during Season 2006-07 to 2009-10 but it was in decreasing trend during season 2010-11 and 2011-12. The market price of raw jute in India was in declining trend during last two seasons due to high carryover stock and lower demand of jute goods. Table-4 & Figure-4 also show that throughout the period the market prices of TD-5 grade raw jute were higher than the MSPs. For the seasons 2012-13 and 2013-14 the Government of India has increased the Minimum Support Prices (MSP) of TD-5 grade raw jute by USD 60 and USD 18 per Tonne respectively compared with the MSPs of previous year. It can be projected that the average market price of TD-5 grade jute is likely to be USD 460/Tonne and 483/Tonne in the seasons 2012-13 and 2013-14 respectively.

The Indian government has also fixed the corresponding MSP for other varieties and grades of raw jute across locations keeping in view, apart from normal market price differentials, the aggregate scores assigned to different grades of raw jute. 

Source: Worldjute.com; IJSG’s Publication titled “World Jute & Kenaf Statistics: at a Glance 2012”; Annual Report of Ministry of Textiles, Government of India; The Jute Baler's Association (Ex West Bengal Price).

Comparison of Jute Prices at grower level between Bangladesh and India

Most of the jute farmers belong to the small and marginal farmer categories. These farmers have inadequate holding capacity, which propels them to offload their produce by the earliest opportunity. Table-5 and Figure-5 show that Indian growers enjoyed better jute prices than growers of Bangladesh in the reported period which is very much important for the sustainability of the growers as well as the jute sector. In 2010/11 growers of both the countries enjoyed better prices comparing with the previous years’ prices. But in 2011/12 Bangladeshi growers faced a sharp decline by around USD 200/Tonne in Jute price. On the other hand Indian growers also faced a decrease in jute price in 2011/12 which was low in magnitude compared with the price decline in Bangladesh due to MSP support. In 2012/13, price increased a little in Bangladesh, but in India, it decreased. Compared with 2008/09, price of jute at grower level increased 10.37% in Bangladesh in 2012/13, and in India it increased by 7.65%.

Jute Corporation of India (JCI) acts as the central government’s nodal agency undertaking price support operations, the Government of India reimburses the losses of JCI incurred in its MSP operations for jute. Moreover in recent years, Government of India has been providing bank guarantee of Rs. 33 crores for MSP, which enables JCI to obtain bank credit to the extent of about Rs. 100 crores. JCI procures raw jute directly in 171 procurement centers or through its agents including primary co-operative societies.  Those initiatives played a vital role for getting better prices of raw jute in India at grower level.   

On the contrary, in Bangladesh there is no MSP for jute as it is prevalent in India. Moreover, there is MSP for paddy/rice. As farmers get competitive returns from substitute crops like rice, they switched over to paddy cultivation from jute. This is because Bangladeshi farmers are suffering more between the two major jute producers which also leads to production fluctuation in Bangladesh from year to year.

Export Prices of Selected Jute Products in India

Export price of Hessian in India was in steady increasing trend from 2008/09 to 2010/11. After that, till 2012/13, the price followed a declining trend (Table-6 and Figure-6). In 2012/13 it increased by 29.43% compared to the price of 2008/09. On the other hand price of Sacking was in fluctuating trend in India during the reported period. In 2012/13 sacking price decreased by 4.79% compared to the price of the year 2008/09.



It can be concluded that Jute prices are subjected to extreme volatility and seasonal fluctuations. Jute has to face competition with other synthetic fibres, especially polypropylene. Whereas the price of jute fibre is about half of propylene, jute sack price generally tends to be more than twice as expensive as polypropylene sack. This price difference affects the competitiveness of jute products. Instability of price of jute and jute products creates serious problems for both producers and consumers. Fluctuation in the price of jute will affect the income received by jute growers and also the overall economy of those countries where the jute industry is of major importance.

The End