Thursday, April 24, 2014

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN




About 2point6billion.com

2point6billion.com discusses business and investment news rising from the geopolitical relations of China and India, and the interactions these two countries have with the rest of emerging Asia.




Bangladesh loosing jute monopoly to India & China

While Vietnam, Cambodia, Burma & Sri Lanka seem to be taking advantage of the opportunities spilling over from India and China, Bangladesh on India’s north east and China’s south west corners seems to be loosing its main export – finished jute products.

A report by Bangladesh’s Daily star says that Bangladesh is loosing millions in jute exports because it exports the raw material to India and China who process it (mostly into bags (gunny sacks)) and later re-export as value added goods.

“Export price of raw jute is around Tk 13,000 a tonne, but its price becomes Tk 35,000 if it is a finished goods (sacks),” Salim Reza, vice chairman of Bangladesh Jute Exporters’ Association, told The Daily Star.

According to official data, during the July-December period this fiscal (2007-08), Bangladesh exported raw jute worth US$82 million, a 13.18 percent increase from the US$72 million exports during the corresponding period in the last fiscal year.

While Bangladesh’s jute goods export has declined by about US$2 million to US$166 million in the first half (till December) of the current fiscal year compared to the same period of the last fiscal year.

India, China and Pakistan have become major buyers of Bangladeshi raw jute in the recent time, exporters said.

During July-December of FY 2007-08, China has imported raw jute worth US$9.12 million from Bangladesh, while India imported US$13.72 million worth of raw jute, Export Promotion Bureau data show.

Other major buyers of Bangladeshi raw jute are Ivory Cost, Russia, Indonesia and Thailand.

“India and China, which import raw jute from Bangladesh and later sell value added products to other countries,” Gopi Kishan Sureka, a local jute exporter, said.

He said: “Recently, a buyer from Taiwan has told me that he got offer from China suppliers at 10 percent less price than I offered him.”

He blamed closure of government jute mills for another major reason for losing the sack export market to China and India.

Salim Reza said China and India’s own consumption also increased significantly in recent time.

Bangladesh had a monopoly market of raw jute and jute goods for long. The country made bags, sacks, sand bags, hessian bags, food grade bags, yarns etc by jute.

Jute-made bags are used for packing agriculture commodities like cotton, coffee, cocoa beans etc. Sand bags made for flood control are also hessian sacks. Since the quality of Bangladesh jute is the best in the world, light weight hessian sacks made here are even much better than heavy jute bags made in other parts of the world.

According to Bangladesh Jute Exporters Association, the country’s local jute demand is around 25 lakh bales per year.

This entry was posted in Foreign Trade. Bookmark the permalink.

3 Responses to Bangladesh loosing jute monopoly to India & China

  1. winddrinker says:

    what a surprise. I thought jute handicrafts are only available here in india!

  2. Chris Devonshire-Ellis says:

    It’s been messed up also since partition and the loss of Calcutta as a trading port for Bangladeshi made products. Both Calcutta lost a major shipping client and Bangladesh lost an international export outlet. It didn’t do anyone any good. – Chris

  3. Jute demand from China and Vietnam is very strong, especially from China. I’m a jute importer from Vietnam. Our bussiness is very difficult because of this.

Comments are closed.



Dezan Shira & Associates provide a range of services for companies looking to undertake foreign direct investment into Asia, These include corporate establishment, accounting, tax, payroll, audit and due diligence. To learn more about the firm, please contact one of our specialists at china@dezshira.com, download our corporate brochure or visit at us www.dezshira.com


Dezan Shira & Associates, Twenty years of Excellence

The Asia Briefing Bookstore

Our best selling legal, financial, tax and regional guides to Asia business, industry reports and more…
Click here to view all titles now

China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store

NOW AVAILABLE IN PDF