Kolkata, Aug 2 (PTI) Raw jute prices in West Bengal have crashed by nearly 50 per cent since early July, raising concerns over the price-fixing mechanism for government jute packaging material even as the industry has questioned the methodology behind daily market quotations.
According to price bulletins issued by the Jute Balers’ Association (JBA), the benchmark rate for TD-5 grade raw jute (South Bengal) fell from Rs 18,300 per quintal on July 9 to Rs 9,100 by August 1, a decline of over Rs 9,000 in about three weeks.
“This is an extraordinary crash that raises serious questions before farmers, jute mills and the government’s packaging system. The industry needs a transaction-based investigation into how prices have moved this way, especially even before adequate arrivals of the new crop hit the market,” said Sanjay Kajaria, industry veteran and former IJMA chairman.
The Indian Jute Mills Association (IJMA), in a letter to JBA chairman Madan Gopal Maheshwari on July 14, alleged that published JBA quotations were “not reflective of the actual price in market trades,” with mills compelled to pay higher prices for ready delivery contracts than the published rates, and deliveries often falling short even then.
IJMA said the JBA’s daily quotations serve as the primary reference used by the jute commissioner’s office to determine the raw jute cost component — accounting for nearly two-thirds of the total manufacturing cost — while fixing the monthly fair price of government jute gunny bags, making any distortion in quotations a matter of concern for the price-fixation mechanism’s credibility.
Responding on July 16, Maheshwari said JBA’s five-member quotations committee records rates quoted by participating mills each working day and evaluates them on a “like-for-like basis” using a standard ready-delivery period of seven to 10 days, while quotations involving non-standard delivery or payment terms are excluded from the benchmark.
“The published quotation is intended to provide a fair, objective and consistent indication of the prevailing market for comparable ready-delivery transactions,” Maheshwari said, adding that the methodology has been “consistently followed” over the years. PTI BSM MNB
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