Raw jute prices breach Rs 11,000 per quintal; mills cut production, shutdowns loom large

Kolkata, Dec 22 (PTI) India's jute industry is facing a deepening crisis as prices of the raw fibre have surged past Rs 11,000 per quintal amid acute shortages and near absence of sellers, forcing several mills in West Bengal to slash production, suspend shifts and shut operations, industry sources said on Monday.

Jagatdal Jute Mill and Mahadev Jute Mill have suspended operations, impacting around 3,000 workers combined, while many other units in the Hooghly industrial belt have reduced operations to bare minimum levels due to non-availability of raw materials, officials said.

Data from the region shows several mills are now operating at just 10-15 shifts a week, far below viable levels, as mill owners conserve limited stocks amid fears of further price escalation.

Traders and stockists are reportedly holding back raw jute in anticipation of higher prices, leaving mills unable to plan production or meet supply commitments despite record-high rates, mill owners claimed.

Sanjay Kajaria, former chairman of the Indian Jute Mills Association (IJMA) and owner of multiple jute mills, warned that the situation could soon spiral into a larger industrial shutdown if immediate corrective steps are not taken.

"Raw jute prices have crossed all sustainable limits. Mills simply cannot operate at these rates. If availability does not improve and prices are not stabilised immediately, more mills will be forced to close, leading to large-scale job losses," Kajaria told PTI.

He said repeated deliberations at the Jute Advisory Group (JAG) have failed to translate into effective ground-level enforcement against hoarding and speculative stockpiling.

"Stock limits exist, but there is no effective policing. Without inspections and penal action, the market has completely slipped out of regulatory control," another leading jute mill official said.

Operational pressure has further intensified after mills began paying Area Dearness Allowance (DA) following a court-mandated revision of jute bag prices by the Ministry of Textiles and the Jute Commissioner's Office.

Industry players said the revision has not adequately compensated for the sharp rise in raw material costs, squeezing already stretched working capital.

A recent high-level meeting involving the Deputy Jute Commissioner and the West Bengal Labour Minister also failed to yield any concrete market intervention, industry sources said.

With the state assembly elections slated for early 2026, mill owners cautioned that continued disruption could have serious implications for employment, jute farmers and foodgrain packaging operations -- a critical sector employing lakhs of farmers and jute mill workers. PTI BSM NN