Jute millers urged the government to ensure low-cost financing to create new factories and diversify products to meet local markets and export.
"The prospect of job creation and currency gains is increasing, due to the growing demand for diversified jute products at home and abroad," said Muhammad Shams-uz- Zoha, president of Bangladesh Jute Mills Association. Letter to the Department of Textiles and Jute at the beginning of this week.
The trade body, a 160 – member forum, required the formation of a Tk 10,000 crore fund, similar to the Export Development Fund (EDF) under the Bank of Bangladesh .
The government formed EDF in 1989 to provide low cost financing and allow export – oriented sectors to buy raw materials from abroad to manufacture exportable items. The size of the EDF, a revolving fund, is about $ 2.5 billion, according to a senior official of the central bank.
The jute millers said that the creation of such a fund in the local currency would be a factor of growth of the sector.
When contacted by phone, State Minister for Textiles and Jute Mirza Azam said: "We are taking an initiative. Such a fund will further facilitate the advancement of the jute sector. "
Azam said the issue was raised before the Prime Minister on March 13. "She asked us to examine what can be done."
He will discuss the issue with the Bangladesh bank next week.
"The sectors of leather and clothing have such advantages. The rights of the jute sector to take advantage of are much more."
The call of jute suckers comes at a time when the government is applying a rule to pack a number of products, including rice, wheat and corn, into jute bags to promote the jute ' 39; use of environmentally friendly products and Jute.
The government is also taking steps to modernize and diversify jute products to restore the past glory of jute, once the leading export producer. He also observed March 6 as Jute Day for the first time this year to highlight the importance of jute in the Bangladesh economy
The Ministry organized a fair in Dhaka from 9 to 13 March to showcase diversified jute products made from nearly 80 lakh balls of raw jute produced each year
About 4 crore people are directly and indirectly involved in the sector which ensures the addition of 100 percent value against exports, according to the ministry.
The association said that entrepreneurs must borrow from banks at an interest rate of 14 to 15 percent to buy raw jute during the harvest season and maintain stocks, to continue Production and export.
On the other hand, other export-oriented sectors such as clothing can import raw materials on the basis of EDF loans at 2.5% Interest plus the London Interbank Offered Rate (LIBOR).
The association said that the jute plants would have been profitable if the entrepreneurs had low-cost loans.
The industry lobby also wants the government to form a special fund so that millers can get competitive loans to upgrade their plants and replace their machines for four to five decades.
India currently provides such support to its contractors to modernize their factories, he added.
From the domestic production of raw jute, public and private mills process a majority of raw jute mainly for shipping to foreign countries.
Local factories produce 9,17 lakh tons of jute goods and export 8,15 lakh tons per year. The rest is used for internal consumption, according to the jute spinners association of Bangladesh.
Export receipts of jute and jute products increased 15 percent to $ 646 million in July-February fiscal year 2016-17 year-on-year, according to Export Promotion Bureau.