The revised prices for jute bags, used in the packaging of foodgrains, have increased significantly this month after the government, for the first time, announced revised prices for such jute bags based on the new pricing methodology.
According to industry players, the announcement of revised prices for B-twill jute bags, used for packaging foodgrains, based on the report of a Tariff Commission, marks a “significant milestone” in the history of India’s jute industry because the new pricing formula factors in raw material costs and operational expenses of jute mills.
The notification from the Jute Commissioner’s Office (JCO), dated November 19, officially announced the revised prices for 580 gm Type-A and Type-B twill jute bags for November, 2024. Accordingly, the maximum ex-factory price per tonne (with Jute Corporation of India linkage) for such bags was fixed at ₹1,02,774, which is around 7 per cent higher compared with ₹95,724 for October. Also, price per 100 bags is fixed at ₹5,960.88 for November against ₹5,551.99 for October, representing around 7 per cent rise.
Benefitting 4 lakh workers
Significantly, the JCO notification on the revised prices has marked the first formal application of the revised pricing formula proposed by the Tariff Commission in its March 2021 report. In August this year, the Cabinet Committee on Economic Affairs (CCEA) approved the new pricing methodology for B-twill jute bags based on the Tariff Commission report, fulfilling a long-standing demand of the jute industry.
Government agencies purchase bags from jute mills every year for compulsory packaging of 100 per cent foodgrains and 20 per cent sugar to provide financial benefits to mills which employ about 4 lakh workers.
Industry insiders said the prices announced for November 2024 set a benchmark for calculating retrospective prices for supplies made under previous PCSOs (production control-cum-supply orders) from September 2016 to October 2024. These retrospective calculations will allow jute mills to recover arrears for the period during which they were underpaid due to ad-hoc pricing.
Set for financial stability
According to the industry players, as the new pricing methodology is based on an authentic cost study, it is more transparent, dynamic and responsive to market changes compared to the earlier one, which was running on a temporary pricing provision.
“The notification on the revised pricing for November represents a major milestone for the jute industry, addressing long-standing demands for fair pricing. While the announcement provides relief from November 2024 onwards, the industry eagerly awaits the retrospective calculations, which will compensate mills for their legitimate dues dating back to September 2016,” said Sanjay Kajaria, former Chairman of the Indian Jute Mills Association.
With the implementation of these revised prices, the jute sector is poised for greater financial stability and operational efficiency, reinforcing its vital role in sustainable packaging and rural employment, Kajaria added.
