Jute trade

Jute trade is currently centered around the Indian subcontinent. The major producing countries of Jute are: Bangladesh, India, China, Thailand, Myanmar. Bangladesh is the largest exporter of raw jute, and India is the largest producer as well as largest consumer of jute products in the world. Therefore, the local price of raw Jute in Bangladesh is the international price. Again, the local price of Jute Goods in India is the international price.

As an input to the Jute manufacturing (goods) industry, the demand for Jute is a derived demand. Nearly 75% of Jute goods are used as packaging materials, burlap (hessian), and sacks. Carpet Backing Cloth, the third major Jute outlet, is fast growing in importance. Currently, it consists of roughly 15% of the world's Jute goods consumption. The remaining products are carpet yarn, cordage, felts, padding, twine, ropes, decorative fabrics, and miscellenious items for industrial use.

Quite recently, Jute has entered the non-woven industry as it is one of the most cost effective high tensile vegetable fibre. Therefore, the demand for Jute has made its way into the automotive industry. Jute is now being used to manufacture more eco-friendly interiors for cars and automobiles.

History of Jute trade

Jute has been grown in the Indian subcontinent for centuries. It was produced for domestic consumption in the villages of East Bengal. However, hand-made Bengali Jute fabrics were exported to American markets as early as the eighteenth century. In 1793, the Bengal Board of Trade sent a Jute fibre sample to the United Kingdom strictly for experimentation related to mechanical processing. The breakthrough came in 1833, when Jute fibre was spun mechanically in Dundee, Scotland. This was the harbinger of the world Jute era. A Jute industry soon mushroomed all over Western Europe with Dundee as its main centre. The first Indian Jute mill was constructed in 1855 at Calcutta (Currently spelled Kolkata), which was the capital of the Bengal Province in British India. By the early 1900s the Calcutta Jute industry surpassed the European Jute industry.

Jute Traders

East India Company

The British East India Company was the British Empire Authority delegated in India from the 17th century to the middle of 20th century. The company was the first Jute trader. The company traded mainly in raw jute during the 19th century. During the start of the 20th century, the company started trading raw jute with Dundee's Jute Industry. This company had monopolistic access to this trade during that time. This company later was also responsible in setting up jute industry in India.

Dundee Jute Barons

The Entrepreneures of the Dundee Jute Industry in Scotland were called The Jute Barons. They generally traded in finished products made from jute. The industry was the gateway for jute products in Europe for almost half a century, starting from the early 19th century to the middle of 19th century. The Dundee Jute Industry started to fall when the Jute Barons started to invest money in setting up Jute mills in the Indian sub-continent, making the products cheaper by utilizing cheap labour of India.

The Marwaris

After the fall of British Empire in India during 1947, most of the Jute Barons started to evacuate India, leaving behind the industrial setup of the Jute Industry. Most of the installations were taken over by the Marwaris. In India, the Marawaris are quite famous for their mustache and aggressive & successful business activities. The Marwaris had their business spread out in India as well as in East Pakistan (Now, Bangladesh). The mills of the Marwaris used to use raw jute from East Pakistan. But, during the Indo-Pak War in 1965 had put a stop to raw jute supply from East Pakistan. But, the Indian Jute industry did not die as India also started to cultivarte jute locally after this incident. This historic initiative now makes India the largest producer of Jute in the world.

Tata and Birla are currently the legendary business giants in India, serving a billion population. But, their first business was Jute Trade. Between them, the Birla family was a Marwari family along with Mittal and Bajaj. The later two families also had jute business in their business line.

Pakistani Jute Families

After liberation from the British, Pakistan (Especially East Pakistan) had the finest jute fiber stock, but lacked a Jute Industry. As the tension started to rise between Pakistan and India, the Pakistani felt the need to setup their own Jute Industry. Several group of Pakistani families (mainly from West Pakistan) came into the jute business by setting up several jute mills in Narayanganj of then East Pakistan.

Among these families, the most significant ones are:

• The Bawanis
• The Adamjees
• The Ispahanis
• The Dau

Bangladeshi Jute Traders

Being the major playground of the long history of jute trade and having relately finer fiber, Bangladesh always had advantage in raw jute trading. Still now Bangladesh is the largest exporter of raw jute in the world. After the seperation of Bangladesh (East Pakistan) from Pakistan in 1971, the jute trading was not limited to specific groups like India or Pakistan. Because, after the seperation of Bangladesh, most of the Pakistani owned Jute Mills were annexed by the government of the newly formed Bangladesh.

Later, to control these Jute mils in Bangladesh, the government built up Bangladesh Jute Mills Corporation (BJMC). No other jute mills were allowed to grow in the private sector before 1975. This incident grew many raw jute traders from different corners of Bangladesh who used to supply raw jute to BJMC owned jute mills. This group of traders are called Beparis, who buy raw jute directly from the farmers.

Bangladesh Jute Mills Corporation (BJMC), a public corporation in Bangladesh, is the largest state owned manufacturing and exporting organization in the world in the jute sector.

BJMC owns and operates a number of jute mills around Bangladesh:

• Dhaka Zone: Bangladesh Jute Mills, Karim Jute Mills, Latif Bawany Jute Mills, U.M.C Jute Mills, Qaumi Jute Mills, Rajshahi Jute Mills,
• Khulna Zone: Aleem Jute Mills, Carpeting Jute Mills, Crescent Jute Mills, Eastern Jute Mills, Jessore Jute Industries, Peoples Jute Mills, Platinum Jubilee Jute Mills, Star Jute Mills
• Chittagong Zone: Amin Jute Mills, Amin Old Field, Gul Ahmed Jute Mills, Hafiz Jute Mills, Karnafuli Jute Mills, Development of Decorative Fabric, M.M. Jute Mills, R.R. Jute Mills, Bagdad-Dhaka Carpet Factory, Furat Karnafuli Carpet Factory

BJMC also operates mills that does not deal in jute, including Galfra Habib Ltd., Mills Furnishing Ltd. and Jute-Fibre Glass Industry.

References

• Pat Sharajantra (Jute Conspiracy - in Bangla), Fazlul Bari, Forum of Environmental Journalists of Bangladesh (FEJB), Dhaka, 2000, ISBN 984-756-005-6
• Evaluation of Jute Policies and a Jute Policy Model for Bangladesh

Sultan Hafeez Rahman, 1984, Bangladesh Institute of Development Studies (BIDS), Dhaka, Bangladesh.

• Report on the Marketing and Transportation of Jute

Indian Central Committee, Calcutta, India, 1940.

• Export Demand Elasticities of Pakistan's Jute Trade

K H Imam, Bulletin of the Oxford University, Institute of Economics and Statistics, Vol. 32 No.1 (Feb. 1970)

• Experiments in Econometric Analysis of an Import Demand Function

Pakistan Economic Journal, Vol.11 No.4 (Sept. 1961)

External links

• International Jute Study Group A UN collaboration for learning various aspects of Jute and Kenaf. Its headquarters is located in Dhaka, Bangladesh.
• World Jute An internet portal for Jute Trade. Contains information about current price, jute companies, and trade policies.
• History of Jute The History of Jute production.