Jute industry incurs Rs 1,250 cr loss due to coronavirus lockdown

The jute sector has incurred an estimated loss of Rs 1,250 crore in the wake of the lockdown which brought livelihood of workers and farmers of the golden fibre at stake, an official of the industry body said on Tuesday.

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The sector is very crucial for the West Bengal's economy as 40 lakh farmers and three lakh workers at the jute mills are associated with the industry which contributes Rs 6,500 crore to the state GDP, he said.

"Around 1.5 lakh tonne of jute goods production with an estimated value of Rs 1,250 crore has already been lost. Some mills have managed to reopen but are functioning with 5- 10 per cent of their workforce," Indian Jute Mills Association chairman Raghavendra Gupta told PTI.

With dwindling cash flow, jute mills are facing hardship and will have "no alternative but to close units", if this situation continues, he said.

Jute industry's loss has been seen as gain to the plastic sector, he said, adding that dilution of mandatory jute packaging has taken place during the lockdown.

"About 3 lakh bales of jute bag orders have been diverted to the plastic industry and several states have asked mills to stop production," IJMA officials told PTI.

If the lockdown is extended further, more dilution of the mandatory jute packaging cannot be ruled out, they said.

"Prices of raw jute have come down as most mills remained closed. The jute fibre price for TDN3 grade has fallen below the minimum support price of Rs 4,225 per quintal," he said.

The carry-over raw jute is now expected to be over 22 lakh bales by end of the 2019-20 crop year.

Gupta said the jute industry has prepared a standard operating procedure to run mills during the lockdown while strictly adhering to social distancing and health safety norms.