This document discusses the prospects of jute as a growth driver for Bangladesh's economy. It provides production data showing that Bangladesh is the second largest producer of jute in the world after India. It outlines opportunities for increasing production of value-added jute products and exporting to international markets. These include growing demand for jute shopping bags, geo-textiles, pulp and paper, as well as uses of jute in industries like automobiles, carpets, and construction. The document argues jute has significant potential to contribute to Bangladesh's economy.

1. Name ID
Aliza Akter 801825022
Ahmed Rujdi 801825041
Farhana Ahmed 801825031
Md. Maruf Ahmed 801825019
Touseef Mesbah Kazi 801825023
Md. Oliur Rahman Pritom 801825040
Mohammad Mostafizur Rahman 801825016
Prepared by : Group 06
Supervisor:
Professor Abu Hena Reza Hasan
Department of International Business
University of Dhaka
Prospect of Jute
as Growth Driver
of the Economy
of Bangladesh

2. • Jute fiber is 100% bio-degradable and recyclable and thus environmentally friendly.
• It has high tensile strength, low extensibility, and ensures better breathability of fabrics. Therefore, jute
is very suitable in agricultural commodity bulk packaging.
• It is the second most important vegetable fiber after cotton, in terms of usage, global consumption,
production, and availability.
• The best source of jute in the world is the Bengal Delta Plain in the Ganges Delta, most of which is
occupied by Bangladesh.
• Jute has the ability to be blended with other fibers, both synthetic and natural, and accepts cellulosic
dye classes
• It is the cheapest vegetable fiber procured from the bast or skin of the plant's stem.
Features of Jute Fibre

3. The traditional use of jute is sacking and hessian that used for packing of
agricultural commodities, cement, fertilizer and manufacturing industries. Carpet-
Backing Cloth (CBC) is another traditional use of jute. Jute yarn and twine are used
for various purposes historically.
The recent innovation of value added uses of jute products, such as jute bags (e.g.
shopping bag, ladies purse, official bag etc.), technical textile, pulp and paper,
geotextiles, home-textiles, decorative items, handicrafts, various types of matt or
floor coverings, various shoes etc. Bangladesh is trying to shift its production to
more value added items using latest technology and production method, these
items called Jute Diversified Products.
Product
Varieties

4. Total Jute, Kenaf & Allied
Fibres: 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
World 3247.8 2588.0 2863.4 3369.0 3342.2 32014.4
Developing Countries 3241.1 2581.3 2856.7 3362.3 3335.5 3194.7
Far East 3175.9 2528.4 2807.2 3316.2 3258.2 3144.4
Bangladesh 1236.8 931.0 1070.1 1404.5 1332.9 1363.0
China 86.8 84.3 75.2 75.2 78.0 78.0
India 1782.0 1476.0 1620.0 1800.0 1845.0 1674.0
Indonesia 4.7 4.1 3.8 4.0 4.0 4.0
Myanmar 19.1 3.6 4.3 9.6 3.8 1.6
Nepal 16.8 17.0 17.7 14.4 15.0 15.0
Thailand 2.2 2.9 2.0 1.7 1.7 1.3
Vietnam 25.7 7.8 12.1 5.0 3.2 6.0
Other 1.8 1.8 2.0 1.8 1.6 1.6
Latin America and
Caribbean 50.4 38.0 35.6 30.9 33.4 33.4
Africa 11.2 11.2 10.3 11.8 13.4 13.4
Near East 3.6 3.6 3.6 3.5 3.5 3.5
Developed countries 6.7 6.7 6.7 6.7 6.7 6.7
World production of Jute, Kenaf and Allied Fibres from 2007/2008 to 2012/2013
in '000 Tonnes (1 tonne = 1000 Kg)Production Capacity
Jute production in the world
limited to few countries though
its uses are around the world.
South, South-east and East Asian
countries have the highest
production capacity of jute.
Latin American and African
countries are producing jute as
well.
India is the largest producer of
jute in the world following
Bangladesh as the second largest
country. Both countries are
producing more than 96% of
total production of the world.
The following table shows the
production of major jute
producing countries and regions. Source: International Jute Study Group

5. Production of Jute in Bangladesh
Bangladesh’s Production
sharply increased in 2011.
Afterwards there was a
moderate decline in the
production until 2015.
Then production of jute
again started to increase.
Production of Jute is
1,544.000 thousand tonnes
in 2019. Production of jute
has decreased from the
previous number of
1,601.000 thousand tonnes
in 2018.
Production of Jute in Bangladesh from 2008-2019
in '000 Tonnes (1 tonne = 1000 Kg)

6. Production of Jute in Bangladesh
Year Yarn Hessian Sacking Carpet
Backing
Carpet Others Total
2012-2013 618.58 57.59 275.82 10.81 0.00 14.51 977.32
2011-2012 537.37 51.07 269.02 16.33 0.00 11.47 885.26
2010-2011 451.41 45.24 196.21 16.79 0.00 19.43 729.07
2009-2010 425.56 40.86 202.53 15.99 0.00 10.22 695.17
2008-2009 330.84 37.83 198.02 13.39 0.00 8.76 588.85
2007-2008 372.22 50.80 188.61 21.22 0.00 18.20 651.05
2006-2007 341.03 39.58 171.10 18.83 0.00 13.08 583.61
2005-2006 298.61 52.84 177.00 23.75 0.02 11.23 563.46
Production of Jute Products by type in Bangladesh
in '000 Tonnes (1 tonne = 1000 Kg)
 Jute sacks production
growth is the highest
among all types of jute
products.

7. • Traditionally jute fiber has been used to manufacture the packaging materials like
hessian, sacking, ropes, twines and home textiles as carpet, carpet backing cloth
etc.
• Demand has been increased for natural fiber like jute is due to their low cost, low
density, biodegradability, renewability and abundance in production over
demands. The global awareness of climate change and improvement of people's
living standards and need for environmental protection, the demand of natural
biodegradable and eco-friendly fibers is rising worldwide day by day.
• The demand for new types of diversified jute products (JDP) like gardening
products, shopping bags, geo-textile, pulp and paper, home textiles, household
products, floor covering and non-woven textiles is very high at the consumers’
level in the international market due to fast changing consumer behavior.
Bangladesh can grab this huge market by following a proper policy.
Prospect
of Jute

8. Prospect of Jute
Decorative & household fabrics 20000 tons (jute content)
Geo-textiles 30000 tons
Shopping and hand bags 6000 tons (250 million units a
year)
Floor coverings 30000 tons
Jute fibre used in composite & plastic reinforcement 30000-100000 tons
All other textile end-uses both industrial and
consumer
30000 tons
Source: Technical Paper: A Road Map For Jute
Looking ten years ahead
considering the world
market potential of the non-
traditional jut products one
can easily predict the
following market profile:

9. Prospect of Jute
 Ecological Imbalance
The artificial fiber based products are being considered as the root causes of many problems while the natural fiber
based products are proven to be absolutely harmless for the environment. The global demand for shopping bags is
immense (about 500 billion pieces a year). Jute made shopping bags can easily replace market of plastic bags that
are made from PP, LDPE, LLDPE, HDPE and other harmful chemicals.
 Value Addition
Value addition in case of diversified jute products means adding value in terms of quality (outlook, size, shape) &
pricing. Adding fashion element to a diversified jute product enhances its outlook as well as increases its selling
price in the market.
Value addition for various JDP items takes different figures and numbers.

10. Prospect of Jute
Name of the
Actors
No of
Actors
Average End Price
(in BDT)
Average Value
Addition
(in BDT)
Average
Value
Addition
(in
percentage)
Reasons for
value
Addition
Value Addition
Factors
Input
Supplier
(Composite
and spinning
Mills)
115 100 40 25.00% To convert
the raw
jute into
yarn and
fabrics
- Salary expense
to factory workers
- Cost of running
machineries for
conversion
- Profit
MSME’s 152 600 120 75.00% To convert
the fabrics
into
handbag
and to add
accessories
- Salary expense
to factory workers
- Cost of running
machineries for
conversion
- Profit
Total value addition 160 100.00%
 For a single handbag value addition in the domestic market .

11. Prospect of Jute
 For a single
handbag value
addition in the
international
market .
 High value added
jute goods have
huge potentials,
as diversified jute
products can add
value 10 times
more than
traditional one.
Name of the
Actors
No of Actors Average End Price
(in BDT)
Average Value
Addition
(in BDT)
Average Value
Addition
(in
percentage)
Reasons for
value Addition
Value Addition
Factors
MSME’s 140 400 50% 120 To convert the
fabrics into
handbag and to
add accessories
-Salary expense
to factory
workers. -Cost of
running
machineries for
conversion -
Profit
Buying house/
Exporters
60 420 30% 60 International
sales and
product
procurement
Sourcing from
the supplier
MSME‟s -L/C or
export process -
Buyer searching
Input supplier
(composite and
spinning mills)
90 100 20% 40 To convert raw
jute into yarn
and fabrics
-Cost of running
machineries for
conversion. -
Salary expense
to factory
workers -Profit
Total value addition 200 100%

12. Prospect of Jute
Jute fibre in car industry
 jute fibre are used to make car dashboards,
door panels, parcel shelves, wheel arches, and
headliners, spare wheel covers etc., plans to go
big in using jute in its production process.
 Already Bangladesh supplies jute fibre to
some of the major automobile giants, and
given the advantages of this light-weight
natural fibre, chances are high that the volume
of export would rise substantially in the near
future.
100000
12000
Natural fibre for global car industry
in tonnes
World Demand of
Natural fibre for
global car industry
Bangladesh Supplies

13. Prospect of Jute
Jute bag
 Jute shopping bags represents total annual world demand for shopping bags of approximately 500 billion
pieces.
Jute pulp
 Bangladesh can produce good quality pulp from jute and from this pulp best quality paper can be produced.
Experts take the view that Bangladesh has the potential to become a major pulp and paper producer from
green jute. The country produces 33 per cent of the world's raw jute and imports 500-600 tonnes of pulp
annually worth US$600 million.
 In Bangladesh, the main fibrous raw materials available for papermaking are short-fibred wood and
agricultural and industrial waste. If jute pulp is used in making paper, it will also protect the environment.

14. Prospect of Jute
Jute sticks for charcoal & carbon fiber
 Charcoal produced from jute sticks is being used both as fuel and photocopier ink. The Charcoal powder is
used for making various products like cosmetics, dried ink of photocopier machine, dry cell batteries, water
filtering and other chemical products.
Jute sticks for charcoal & carbon fiber
 Viscose-a semi-synthetic fibre from jute could be a substitute of cotton. Bangladesh being one of the largest
importers of cotton, its substitute could be very useful for the textile mills. Commercial production of viscose
from raw jute would help Bangladesh save foreign exchange equivalent to taka 1000 crore annually now
spent on cotton imports.
Jute boat
 Jute-plastic blended boat has already been commissioned in Bangladesh with the assistance of two
Norwegian naval architects. Bangladesh is a country frequently hit by natural calamities like floods. This kind
of fibre boats, which do not sink easily, would help people navigate during floods. Also wood prices are
increasing day by day and jute is cheaper than any other materials.

15. Market Opportunities
The world is more concerned about climate change, which has helped up open new opportunities for Bangladesh.
Bangladesh is producing quality jute yarn and, because of that, the demand has increased. The price has also
increased by about USD 500 to USD 600 per tonne of yarn.
Domestic Market
 The domestic market of Bangladesh for jute bags worth taka 100 crore
 Jute Packaging Act 2010, 19 agricultural and industrial commodities, including food grains, sugar and
fertilizer, must be packaged in jute bags, but that remains mainly on paper.
 Domestic and export trade of JDPs roughly accounts for BDT 300crores. Banks, NGOs, MNCs and other
pharmaceuticals companies are the major domestic institutional buyers of JDP. They generally order for large
amount of JDPs for their annual picnics, AGMs and to provide gifts to their stakeholders/clients.
Approximately 90% of domestic demand is fulfilled by these institutional buyers in spite of the fact that they
ask for JDPs once in a year.

16. International Market
 World market for jute bag will reach US$3.10 billion by 2024. The export earnings only
from jute-made shopping bags are expected to exceed US$ 1.0 billion a year
 28 countries of the European Union (EU) as well as New Zealand and Canada have
taken an initiative recently to ban single-use polythene bags in their territories.
 Luxemburg and Denmark have already imposed taxes on these bags. There is a demand
for non-plastic bags worth Tk 47.5 billion in the EU alone.
 UK and Australia have also enacted partial ban on plastic bags while heavy taxes have
been imposed on plastics sacks by Italy and Belgium.
 The US is now mainly importing jute carrier bags from China and India. But it is looking
for alternative markets like Vietnam and Cambodia for cheaper bags following the
wage hike in China. So it is high time to attract US buyers toward Bangladeshi jute
products.
 The UAE authority banned plastic shopping bags. t needs 9.0 billion jute bags for the
UAE shopping malls and grocery markets. The UAE authorities imposed an embargo on
plastic shopping bags. The country has already started phasing out the plastic bags
from their shopping malls.
Jute bag

17. International Market
 The Charcoal powder produced from jute stick is used for making various products like
cosmetics, dried ink of photocopier machine, dry cell batteries, water filtering and
other chemical products.
 Japan, Turkey, the United States, Australia, Taiwan, Canada and Mexico have demand
for charcoal powder.
 There is possibility to earn $30,00,000 to $35,00,000 annually from jute stick
Charcoal
Powder
Jute plastic
boat
 Export market of jute plastic boat has tremendous prospects to Norway and Sweden.
 The cost of 28 feet long jute plastic boat is taka 200000.

18. International Market
Jute for Carpet
Industry
Jute-geotextile
 The natural formation of soil, hilly lands, river side and embankments in Australia
present a huge market for jute-geotextile.
 Also as floor coverings are important lifestyle for Australians and consumer
preference are shifting from synthetics to natural one, Bangladeshi jute made floor
covering (e.g. locally called Satranji) producers will get a potential market for their
product.
 Turkey hold the major share of global carpet markets worth $5.0 billion. Turkey
imports jute yarns from Bangladesh for her carpet industry. Other importers of
Bangladeshi jute yarn are Iran & China for making carpets targeting western markets.

19. Competitiveness
National Competitive
Advantage
(Porter’s diamond
model)
 Factor Endowments
Bangladesh produces, as of 2018, 33% of the total worldwide production of jute,
produces the finest quality natural jute fibre and also Cost of labor is low.
Due to its ability to produce high volumes of yarn, Bangladesh is better poised than
India in the area of diversified non-traditional jute goods. Although India has the first-
mover advantage in diversified jute goods and perceived globally as more fashion-
oriented compared to Bangladesh, the latter has not yet realized its full value added
potential in this sub-sector.
 Demand Conditions
The domestic market of Bangladesh for jute bags worth taka 100 crore.
Jute & jute goods is the third sector to have crossed the USD 1 billion-mark in export
receipts.
Demand for jute products in international market has propelled owing to a change in
mindset amongst consumers preferring eco-friendly products over synthetic counterpart.
World market for jute bag only will reach US$3.10 billion by 2024.

20. Competitiveness
National Competitive
Advantage
(Porter’s diamond
model)
 Related & supporting industries
The high cost of borrowing and difficulties accessing finance present significant
obstacles in jute sector of Bangladesh. Restricted access to finance pushes firms to
internally finance growth, which contributes to slow growth and slow product
diversification.
 Firm strategy, structure, rivalry
Lack of modernization in jute cultivation and manufacturing units. Much of the milling
machinery in Bangladesh is outdated.
The cost of producing quality yarn is 40% higher in Bangladesh than in India, because
of the technological disadvantages.

21. Competitiveness
Description Bangladesh India
2005 2009 2005 2009
Jute and other textile bast
fibres, raw or retted
1021.2 648.7 2.4 2.6
Jute and other bast fibres, not spun, nes, tow,
waste
615.1 351.1 0.5 0.4
Yarn of jute or textile bast fibres nes, single 978.9 688.9 7.2 2.7
Yarn of jute, textile bast fibre
nes, multiple, cable
179.7 529.2 68.5 13.2
Woven fabric of jute/bast fibres,
unbleached/bleached
326.8 200.9 51.8 37.7
Woven fabric of jute/bast fibre, not
unbleached/bleached
357.2 55.6 1.7 0.9
Twine, cordage, ropes and cables of jute, bast fibre 655.1 423.1 5.5 0.0
Carpets & textile floor covering, nes 3.5 0.1 21.9 14.2
Sacks & bags of jute for packages of goods 451.2 239.9 39.0 18.0
Revealed
Comparative
Advantage
(RCA)
Bangladesh enjoyed
the highest RCA in
all items of raw jute
and jute goods except
carpet.
On the other hand,
India had the highest
RCA in carpet.
Source: Trade Map Database.

22. Competitiveness
Competitiveness of jute & hard fibres and polypropylene
Factor Jute & Hard Fibres Polypropylene
Technical
characteristics
(+) Breathability (jute bags)
(+) Reusability and biodegradability
(+) Natural look
(-) Presence of dust and fine fibres
(-) Unsuitable for automatic filling
systems
(+) High tensile strength &
impact resistance
(+) Light weight
(+) Rot-proof, not shrinkable and
water-resistant
(-) Danger of flammability and
smoke toxicity
Quality (-) Occasional problems (+) Consistent quality
Reliability of
supplies
(-) instability of supplies due to the
dependence on weather conditions
and a long-distance transport
(+) Regular supplies, production
possible at short notice
Marketing (-) Absence of an organized marketing
system
(+)Aggressive marketing
strategies
Source: UNCTAD
Note: (+) stands for positive quality; and (-) stands for negative quality
 Breathability is required for
vegetable and fruit packaging.
Jute bags are preferred in such
cases.
 Reusability and biodegradability
of jute sacks make jute more
competitive. Due to the
environmental awareness with
regard to use of natural fibre,
jute is gaining importance.
 Apart from favorable shift
towards bio-degradable jute
products, price of synthetic
substitutes have increased
owing to sustained oil price hike.

23. Export Performance
824.49
868.53
919.58
962.42
1025.55
816.20
FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Export of jute & jute goods (in millions of $)
 jute and jute goods is the third
sector to have crossed the
USD 1 billion-mark in export
receipts.
 Bangladesh exports 60% of its
jute products.
Source: EPB

24. Export Performance
Export performance of major commodity of Bangladesh
Major Commodity July-November
of FY 2018-19
July-November
of FY 2019-20
Increase/Decrease
Jute & Jute goods $351.5 Million $404.79 Million +15.16%
RMG $14.18 Billion $13.08 Billion -7.74%
Textile $340.7 Million 298.65 Million -12.34
Leather & leather goods $434.70 Million $391.09 Million -10.03%
Frozen & live fish $253.03 Million $235.11 Million -7.62%
Vegetables, fruits & Spices $458.33 Million $446.32 Million -2.69%
Pharmaceuticals $57.74 Million $59.49 Million +2.94%
Export earnings of major commodity of Bangladesh between July-November of FY 2018-19 &
July-November of FY 2019-20

25. Barriers
Production inefficiency
China, India, Japan, Turkey, and other countries purchase raw jute from Bangladesh and process it with modern,
more cost-effective equipment than is available in Bangladesh. Compounding the age of the machinery in
Bangladesh is the fact that the company that manufactured the machines, Dundee (Scotland), went out of
business decades ago and spare parts are not available. Spare parts must be custom made in local machine
shops, making it difficult to match the original parts.
Currency Appreciation
Bangladesh is losing its competitiveness in the global market due to its overvalued currency. In the global
market, local currencies are depreciating against the dollar. But the taka is getting stronger against the dollar. So,
we fell short in terms of exporting goods compared to our competitor countries. On the other hand, US dollar
appreciated against Indian rupee, which enabled Indian jute goods makers to offer lower prices than those
offered by Bangladesh.
Lack of implementation of Jute Packaging Act
Though the government has passed Mandatory Jute Packaging Act 2010, but there is hardly any implementation
of that law in reality. As such, the domestic market is not growing much.

26. Barriers
Lack of expertise to connect with global buyers
A good number of small entrepreneurs in the emerging jute-diversified sector are struggling to establish
networks with buyers as they are unable to take part in international expositions to connect with buyers due to
associated costs. As a result, despite high demand in international markets and adequate production capacity
domestically, Bangladesh is yet to tap the export market for jute and diversified jute goods, and are yet to utilize
their full potential. There is a lack of initiative as far as the role of the government is concerned, to explore new
markets and establish connections with buyers and start-up exporters.
Lack of knowledge on product development techniques
Lack of training institution to improve the design and specification of jute diversified products. Most of the
time, entrepreneurs copy the products from others. The situation leads to manufacturing limited variety of jute
diversified product items.

27. Recommendation
 Establishing a technical institute for developing technical experts and
professional designers with proper research and innovation facilities
 The government should take an effective jute goods diversification policy
including setting up several special industrial zones like the EPZs for diversifying
local jute products to attract local and foreign investors.
 The jute packing law enacted by parliament should be enforced strictly by the
Government of Bangladesh, as is the case in India. This will result in increased
domestic demand for jute and jute goods, and enhanced exports, employment
and output.
 Tariff barriers and NTBs inhibit the export performance of a number of jute
items in the global market. TBTs in jute and jute products will need to be
resolved through negotiation in appropriate platforms. Concerned organizations
should undertake elaborative study on technical barriers such as standards and
certification system and/or producer related to the jute sector.

28. Conclusion
Bangladesh is yet to tap the full potentials due to lack of proper and time-befitting strategy as well as
non-implementation of the government policies. Both domestic and global policies will need to be
brought to play, to realize the emerging potential opportunities for Bangladesh.
Strategy should be to enhance her market share in the growing global market through jute diversified
products in order to obtain higher value.
If proper government policy framework can be undertaken, this sector can contribute a lot for
achieving Sustainable Development Goals (SDGs) for Bangladesh. Proper policy support and
adjustment of fiscal burden could lead jute to be the ‘third wave’ as an economic growth driver.