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Introduction

Jute is considered as the main crop of Bangladesh. its influence on ecology and

economy is so intimate that its the effects are significantly related to the agro-

ecology and the socio-economic life of the people(Masum S.M.lecturer, department

of agro-economy,Sher-e-Bangla ,Agriculture University, Dhaka 1207 ).jute crop os

also cultivated in different countries. Among the jute growing countries in the

world ,Bangladesh rank second in respect of production.(ALI M.H.professor

,department of agro-economy, Sher-e-Bangla, Agriculture University, Dhaka 1207).

It covers about 4.14% of total cropped area and accounts for about 16% of total

exchange through exchange of raw jute and jute product(BBS,2004). Besides jute

fibre and jute sticks are largely used for different domestic purposes. In addition,

jute plants improved soil productivity because of its massive leaf fall and

proliferation in the field(Amin A.K.M.R ,Assistant professor, Department of agro-

economy, Sher-e-Bangla, Agrculture University, Dhaka 1207). Now jute has been

facing tremendous threat from synthetic material. Therefore, the quality and per

hectare yield of jute crop(Asaduzzaman M.Associate professor, Department of Agro-

economy, Sher-e-Bangla, Agriculture University ).

(http://.bdresearchpublications.com/admin/journal.pdf)

Competitiveness of Jute Sector of Bangladesh

Jute sector of Bangladesh losing its competitiveness in the growing world market

several reasons can be put in front for that. As India is now hold the largest stake of

international market in both export and production terms I choose India as base for

comparison. And it can clearly seen by the following two graph.

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Graph 2: Major Producer of Jute Goods (Source FAO) [5]

Graph 2: Major Exporter of Jute Goods (Source FAO) [5]

Though the export seems to be rising after the initial drop in the year 2003

Bangladesh jute industry is suffering from other issues which are hindering their

competitiveness in the world market. These factors of competitiveness and their

effect on Bangladesh jute industry are discussed below.

(Competitiveness of the Bangladesh Ready-made Garment Industry in Major InternationalMarkets by Ziaul Haider, Asia-Pacific Trade and Investment Review, Vol. 3, No. 1, June 2007)

Factors of Competitiveness and their effect

1.0 Production and Export

India has been the leading jute producers since the 1970s. Today it produces 1.977

million metric tons of jute while Bangladesh produces only 963,000 metric tons in

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2003-04. The more recent growers like China and Thailand decreased output in the

1980s and 1990s. Myanmar, Nepal and Brazil are just some small producers on the

edge. Bangladesh's total production of jute goods decreased by 53.94 percent while

India's increased by 42.5 percent. Jute growing area in Bangladesh reduced by 8.3

percent over the last six years although jute production increased 3.2 percent

mainly because of a yield growth of 12.5 percent. And in 23 years since 1981,Bangladesh's total production of jute goods decreased by 53.94 percent while

India's increased by 42.5 percent.

(The Daily Star, From heyday to doomsday, August 01, 2007)

2.0 Area Wise Production(Hg/Ha)

Graph 3: Area Wise Production (Source FAO)

3.0 Raw Jute Export

Bangladesh export jute to India and china in raw form, china and India produces

jute products with those jutes and then export those in the world market. It is

becoming a problem for Bangladesh as Bangladesh is losing a major value of their

goods in the world market. According to the vice chairman of Bangladesh jute

export association Bangladesh is losing TK 22000 per tones for just exporting raw

jute. If they can export jute product they could have fetch more from the market.

(http://www.epb.gov.bd/export_Trend.php )

4.0 Price Comparison:

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Graph 4: Price (Source FAO)

5.0 Technology:

Jute industry is also starving for new technologies as maximum machinery are of

1960 models some are even running from 1930. So now a days it take 40 man-days

to produce a ton of yarn or fabrics (The Daily Star, From heyday to doomsday, August 01,

2007). It is because Bangladeshi entrepreneurs had Imported second hand

machinery from the Europe, Pakis tan and some other where they had already

abandoned those things.

6.0

Lack of Motivation among farmers

Price to Farmer/tonnes (in US $)

Product

2001 2002 2003 2004 2005 2006

Jute 125.25 128.78 136.78 127.9 119.64 219.86

Rice 108.05 114.01 103.18 142.84 143.86 139.03

Hector wise Yield

Prod

uct

2001 2002 2003 2004 2005 2006

Jute 18,803

18,320

19,464

18,692

20,796

21,097

Rice 34,020

34,902

35,768

35,358

37,813

38,541

Total revenue to Farmer (in US $)

Product

2001 2002 2003 2004 2005 2006

Jute 2,355,075.75

2,359,249.60

2,662,285.92

2,390,706.80

2,488,033.44

4,638,386.42

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Rice 3,675,861.00

3,979,177.02

3,690,542.24

5,050,536.72

5,439,778.18

5,358,355.23

Table 1: Yield from jute (Source FAO)

This table shows that farmers earning more if they produce rice in the same area of

land than they will get from the jutes production. Though jute gives them a initial

payment of high price per tones than rice but ultimately they gain less in producing

jute. Thats one of the major drawback Bangladeshs jute market is experiencing in

recent times. That is why farmers are not getting interested in producing jute more.

(http://faostat.fao.org as on 2ndSeptember, 2009)

Industry Dynamics

1.0 Threats of New Entry: Market we are concerned here is the world market andits a free market here the quality, price and availibility is the determinent of

market entry if any country thinks that they can comply with these

charecteristics they can make their entry into the market without any

obstacle.

2.0 Intensity of Competition among competitors:

Competiotions intensity is low rathe bangladesh is facing competition from their

inner forces more than the outer forces. But in recent time the financial crisis and

devaluation in Indian Rupee made india more lucrative interms of exporting jute

and jute goods.

3.0 Threat from substitute product:

Synthetic is becoming substitute for jute in many industries. But at the same time

there is a concern rising to protect our environment. And synthetic is one of the

reasons why environment is getting polluted. That is the reason of not facing

competition from synthetic even after being closest competitor of jute.

How to regain world market competitiveness

Here is some measures which could be taken as a matter to be competitive in the

world market again:

Bangladesh should get out of the Old Stone Age farming techniques and

should adopt some more scientific manner to produce effectively and to

increase the per capita yield.

http://faostat.fao.or/http://faostat.fao.or/

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Bangladesh should maintain a good stable farm gate price for producers

which will encourage them to produce jute.

Bangladesh should diversify their product portfolio and develop more of those

products which are highly demanded in the world market.

Bangladesh should focus on producing more jute goods on its own rather

exporting raw jutes to their competitor.

Govt. should subsidize the jute sector in order to maintain the production cost

at a stable level.

It should capitalize the concern for using more environment safe product.

Should ensure the sources of resources (e.g. land, labor, fertilizer, water) are

consistent in the production season.

Conclusion

As Bangladesh is facing problem more from inner side than the outer side

Bangladesh has to solve this problem in restructuring some of their traditional views

and thoughts about jute market. India inspite of being the largest producer almost

60% of their portion are internally consumed so if Bangladesh can mobilize their

resources in a good manner than it will be soon when this Golden Fiber will bring

golden foreign currency to them. So it is high time to pick up and take some

positive steps to develop this market before it is too late and other producer build

their capacity.

References:

1. (http://.bdresearchpublications.com/admin/journal.pdf)

2. Jute Manufacturing Sector of Bangladesh Challenges, Opportunities and Policy Options, by

Moazzem Khondaker Golam, Moazzem Md. Tariqur and Sobhan Abdus, paper 78 Published by

CPD

3. http://www.epb.gov.bd/export_Trend.php

4. Competitiveness of the Bangladesh jute Industry in Major International Markets by Ziaul Haider,

Asia-Pacific Trade and Investment Review, Vol. 3, No. 1, June 2007

5. Series of Crises Hit Industry, Jute export prices lower than production cost, The Daily Star, 22ndNovember, 2008

6. http://faostat.fao.org as on 2nd September, 2009

7. The Daily Star, August 01, 2009, From heyday to doomsday,

http://www.thedailystar.net/2007/08/01/d7080101044.htm

http://faostat.fao.or/http://faostat.fao.or/