WEST BENGAL TO GET 3 NEW JUTE MILLS

Amid talks of crisis and impending disaster in the jute industry, three new jute mills are coming up in the state, raising questions about whether the crisis is genuine at all. However, the three new mills, with an investment of about Rs. 100.00 crore, are coming up with a price tag for the workers. Though about 10,000 workers will get employment, they will have to accept a much lower pay than their counterparts working in other mills in the state.

All the three factories were expected to start production within 2002. Industry department sources said the government had "agreed in principle" that in order to cope with stiff competition in the post-WTO regime, it was necessary to reduce the minimum wage of the workers to make production more cost effective. Competition in the domestic market from neighbouring Bangladesh, both in the raw jute and finished products segments, and from China, Nigeria and the Philippines in the international market left the government with no option but to agree to lower wages for the workers. At present 40 per cent of the production cost is spent on wages, the three investors told the minister.

According to the new rules, which the government plans to introduce soon, the minimum wage of a worker will be about Rs. 60/= per day. The last industry-wise wage agreement had fixed the minimum wage at about Rs. 130.00.

JUTE PACKAGING ORDER EXTENDED

As per the present stipulations, use of jute packing material is compulsory for upto 90 per cent in the case of both food grains and sugar and 15 per cent in the case of urea. While the jute industry has been demanding continuation of the present packing order, the plastic industry has said the reservation should be done away with.

IJMA TO CONTEST MJPO DILUTION, FILES PETITION

Indian Jute Mills Association had recently appealed to the Ahmedabad High Court against an court order in favour of Gujrat State Federation of Co-operative Sugar Factories regarding dilution in the mandatory jute packaging order. The court has recently passed an order on June 16 favouring dilution of the packaging or to 90 per cent for packing sugar and food grains and 15 per cent for fertilizer. The earlier stipulation was 100 per cent for food grain and sugar and 20 per cent for fertiliser.

SACKING RULES STEADY BUT HESSAIN TAKES DIP

The Kolkata gunny market suffered a moderate set back this past week with prices of sacking somehow maintaining but hessian constructions reacting further due to continued poor demand in both domestic and overseas makets. While the price of standard B> Twill 21b remained unchanges at Rs.24,000 per tonne on heavy departmental buying of gunnies that of hessain 70oz closed the week lower by Rs. 200 to Rs. 30,100 per tonne on trred bull liquidation followed by sustained near pressure. Activity was restricted and closing undertone hesitant.

During the week under review, there was no departmental buying of branded bags but the local gunny trade and jute industry were optimistic about two lakh bales of jute bags early next week for August delivery and almost similar quantity in end-August for September to fulfil the targeted quantity of 7.45 lakhs bales for kharif foodgrain procurement. In fact, the industry's monthly sacking production capacity of 75,000 tonnes or so was almost fully booked till September and industry was hardly left with any excess production of sacking materials to sell in the open market.

Besides, week demand from commodity sector, the off take of A. Twill bags by the sugar industry was yet to be started with the new canecrushing season to begin from October onwards. But for the heavy government buying, gunny prices would have crashed on a broadfront. Admittedly, the industry appeared to be quite comfortable with its sacking production, thanks no sustained departmental support but it was not so in case of hessain.

The persistent weakness in hessain prices where industry was incurring a loss of Rs. 3,000 per tonne till recently acted as a drug on the industry's balancing viability factor. After ruling high for some weaks,local raw jute market turned easy with the ready delivery new crop being quoted at Rs. 1200 per quintal and August forward at Rs. 1000 per quintal basis TD-4 at Kolkata terminal market.

However the old crop was quoted around Rs. 1300 per quintal for the same grade against Rs. 1650 per quintal a couple of weeks ago. The current softness in the raw prices was attributed to the arrivals of new crop which were gradually gaining momentum day by day. In fact, the peak arrival period was expected somewhat early this time, thanks to the bumper harvest of jute crop for 2001-2002 season which was being estimated over 10 million bales compared to less than 8.5 million bales in the previous season.

Sustained government buying of sacking and falling raw jute prices prompted many closed jute mills to reopen after settling their scores with trade unions and labour. In fact, out of 17 jute mills which issued work suspension orders during the last seven months or so, no l;ess then five jute mills had already resumed production and according to state labour department sources another four or five mills would reopen before the end of July.