Traders in a tight spot as BJMC sits on jute bills

Jute traders who used to buy raw jute from grassroots farmers and supply the cash crop to state-owned mills are in the soup as their Tk227 crore payments are stuck with the Bangladesh Jute Mills Corporation (BJMC).

"Jute business has now made us penniless," said Ekramul Haque Nabin, joint general secretary of Jamalpur District Jute Traders Association.

In the face of growing pressure from banks and jute farmers for payment, Nabin says some of the jute traders had to go into hiding.

"Banks are filing cases against us over the dues. Besides, farmers are also turning up at our homes seeking their payments."

Nabin said the traders have done everything to get their money from the BJMC so that they can clear the arrears of the farmers and bank loans, but to no avail.

In the face of recurring losses, 26 state-run jute mills permanently shut production last year with an estimated Tk227.41 crore in dues to jute suppliers. The traders subsequently took to the streets seeking payment. The BJMC assured them of clearing the arrears as soon as possible.

However, the traders are yet to get the money. At a media briefing, leaders of the jute trading community said their arrears amounted to Tk265 crore.

The Parliamentary Standing Committee on the Ministry of Textiles and Jute, at a recent meeting, said the textile and jute ministry has sought allocation from the finance ministry to clear the dues. The textiles and jute ministry has said it will be possible to clear the arrears in the 2021-22 fiscal year subject to receiving the allocation.

"The traders will be paid as soon as we receive the fund from the finance ministry," Md Abdur Rouf, chairman of the BJMC, told The Business Standard.

He said the authorities are aware of the arrears of the traders and the BJMC is working to clear the payments quickly.

Jute is grown mainly in Khulna, Faridpur and the North Bengal districts. There are around 1,000 jute traders around the country who buy the crop directly from jute farmers and supply it to the public and private jute mills.

The BJMC has 182 purchase centres across the country for buying raw jute. Before their closure in 2020, the public jute mills used to produce mainly hessian fabrics, hessian bags, sacking cloth, sacking bags, yarn, geo-jute, blanket, jute canvas and carpet backing cloth.

Privatisation bid amid payment delay

Khulna jute trader Shamim Ahmed Morol used to buy jute from farmers and sell it to the government-run jute mills. He said the BJMC owes him around Tk2.5 crore for jute he purchased from farmers with bank loans and supplied to the mills.

"I do not know when the BJMC will pay me," said the jute trader. Like him, when hundreds of jute suppliers are in the dark about their payments, the BJMC is hurrying up to lease out the shuttered state-run jute mills to private companies.

Expressions of interest were sought from private firms through an international tender floated in March this year.

After verifying the submissions, 48 firms in the second phase were asked to submit final proposals. Subsequently, the BJMC lease committee selected 25 proposals placed by 15 companies to lease out the shuttered mills.

However, the list of the private sector entrepreneurs is yet to be finalised.

Shamim Ahmed Morol, who is also the convener of Bangladesh Jute Traders Association, said he had put up most of his business capital by bank borrowing.

"Interest on the loans just keeps mounting — taking a huge toll on me. Some of the traders have already closed down their offices," an upset Morol said.

The jute traders' leader requested the government to clear their payments immediately.

Before Bangladesh's independence in 1971, the country had 75 jute mills, and the figure rose to 82 in 1981.

After 1982, 35 mills were privatised while the government also withdrew capital from eight. One mill was merged with Mymensingh Jute Mills.

Eleven mills were shut down, sold or merged with other mills at different periods after 1993, including Adamjee Jute Mills, which was shut down in 2002.

The BJMC later resumed production in two mills in 2011 and three in 2013, taking the number of operational public mills to 32.