'States directly placing orders for jute bags bypassing central procurement'

Some states are directly placing jute bag orders for packaging foodgrains, bypassing the procurement method of the Centre, which aggregates the overall requirement based on supply commitment by mills and allocates quantities, industry sources said.

Punjab has already floated a tender to procure 1 lakh bales of jute bags and the last date for submitting bids is August 13, while Chhattisgarh is in the process of issuing a similar offer for direct purchase, they said.

“The Centre’s allocation of jute bags is less for large food-producing states compared to their demand and secondly, non-implementation of new rates of bags despite recommendations from the tariff commission has led to some slowdown in supply under the government procurement route, as mills were incurring losses,” one of the sources said.

“The government apprehends short supply, with the mills remaining skeptical as production of bags were leading to losses, after costs soared due to rise in raw jute price,” he said.

Food Department officials from Punjab have already visited West Bengal regarding direct supply of jute bags, the sources said.

Indian Jute Mills Association sources said there is a strong possibility that the Union government might decide on 45 per cent dilution in wheat packaging orders from 100 per cent at present, which might deal a blow to the West Bengal economy at a time when a bumper crop is expected.

The West Bengal government is aware of the situation and will oppose any such move, they said.

The state’s food minister could not be contacted for comments.