Bangladesh’s Ban on Raw Jute Exports Threatens Nepali Jute Industry

Jute manufacturers of Nepal are facing a shortage of raw materials after Bangladesh temporarily banned exports of raw jute two weeks ago, affecting six jute mills operating in the Sunsari-Morang Industrial Corridor.

Nepali industries had increasingly relied on Bangladeshi jute for production as Indian jute became more expensive. “Global warming has disrupted jute production, causing unexpected declines across all sources,” said Rajkumar Golchha, president of the Nepal Jute Industries Association. He added that Bangladesh’s export ban is expected to be lifted in a few days, but both India and Nepal have also seen reduced jute output this season.

Bangladesh’s domestic jute production has fallen by roughly 100,000 tons this year, from 1.7 million tons last year to 1.6 million tons, according to government data. With over 150 jute industries operating in Bangladesh, the government restricted exports to meet internal demand, local media reported. While the ban could pose a serious challenge if prolonged, local Nepali production currently cushions the immediate impact on domestic industries.

Nepali jute manufacturers, long struggling with a decade-long export crisis caused by a four percent anti-dumping duty imposed by India, had become increasingly dependent on Bangladeshi raw jute due to its better quality and lower cost compared to India. Nearly 95 percent of Nepal’s jute output is exported to India.

According to the Department of Customs, exports of jute products from Nepal to India exceeded Rs 800 million last year.

Nepal imported 432,000 kg of jute worth Rs 5.65 million from India in the first month of the current fiscal year, while it imported 2.4 million kg valued at Rs 28.57 million from Bangladesh in the same period.

Som Adhikari, general secretary of the Nepal Jute Industries Association, warned that if Bangladesh’s ban continues, Nepali mills will be forced to import more expensive Indian jute, which cannot compete cost-effectively with industry requirements. “If the export restriction persists, Nepali production could fall by more than half,” he said.

The six jute mills in the Sunsari-Morang corridor require about 70,000 tons of raw jute annually, of which local production can meet only 20,000 tons. The remainder depends on imports from India and Bangladesh. Currently, industry sources say raw jute in Bangladesh is Rs 10–15 per kilogram cheaper than in India.

Both India and Bangladesh are considered hubs of jute production, but this year’s lower yields have driven up prices. India’s output fell from 1.765 million tons last year to approximately 1.5 million tons this year. On September 8, Bangladesh’s Ministry of Commerce issued a circular placing raw jute exports under “conditional” approval. Despite presenting the necessary documentation, Nepali industries report that Bangladesh did not grant export permits. Only around 50 trucks, whose payments had been settled two weeks ago, were shipped before the ban took effect.