Abstract
The study attempts to examine growth and instability, financial and economic profitability, marketing efficiency and market integration including problems and prospects of export-oriented jute in Bangladesh. Five intensive jute producing regions namely Faridpur, Kurigram, Kushtia, Jamalpur and Jessore were selected for collecting related primary data during 2010-11. A total of 290 respondents taking 150 jute growers and 140 jute traders of different categories along with key informants of related organizations were interviewed. In this study the growth rates were estimated by fitting exponential function. The instability index was used for better reflect the true instability situation of different variables regarding jute production and marketing. For forecasting purpose, nine deterministic time series models were considered. Enterprise budgets were used to estimate financial profitability of jute cultivation. Economic profitability of jute with its main alternative crop Aus was measured including an assessment of comparative advantage using policy analysis matrix (PAM). Johansen (1988) cointegration approach was used to estimate a stationary relationship between world and Bangladeshi raw jute prices as well as among the regional market prices of raw jute in Bangladesh. Finally, to measure marketing efficiency of raw jute, six performance indicators such as (i) per cent of product which flows out through the channel (ii) producers' share to consumers price, (iii) relative marketing costs, (iv) level of middlemen's' margin, (v) price deviation and (vi) seasonal price variability were used in this study. The study found an increasing growth trend of jute production (0.2%) and yield (1.7%) in post-trade liberalization period in spite of significant negative growth of area (1.5%). Growth of harvest time real price of raw jute and quantity exports and prices of raw jute and jute goods at world market showed positive trends in the same period. Moreover, instability in area, production, yield and harvest time price of raw jute also decreased remarkably in post- trade liberalization period. All these aspects might be considered as an indication of future prospects and sustainability of jute in Bangladesh. The forecasting results also confirmed to the prospects of jute in the predicted years. In contrast, internal consumption of jute goods decreased significantly in post-trade liberalization period, which might be due to the wide expansion of cheaper synthetic substitute usage over the previous period. Lower growth was observed for jute goods export compared to raw jute and it might be due to the stiff competition against cheaper synthetic substitutes of the world: Moreover, export prices of raw jute and jute goods in real term found more unstable in post-trade liberalization period. To avoid entire dependency on export market and to ensure more domestic consumption for bringing stability to raw jute and jute goods prices, mandatory use of jute goods in packaging act must be implemented immediately. Besides, government rules on restriction of manufacturing, marketing and use of polythene products should be strictly maintained. Financial analysis confirmed that jute production was more profitable compared to Aus in the study areas. The DRC of jute production showed that jute enjoyed comparative advantage as an import substitution proposition. The farmers achieved the highest benefits if they sold it directly to the kutcha balers through the most efficient channel (Producers-Kutcha balers- Pucca balers cum Exporters) of the study area. The existing jute market faced high seasonal variability and deviation in prices. For reducing that government should establish more storage facilities at major jute growing areas with private participation to store enough jute. Government should purchase raw jute directly from the producers throughout the year under the public procurement programme with minimum support price (MSP) without any harassment. The study estimated a moderate level of integration between domestic and world raw jute market. The study also confirmed all regional raw jute markets in Bangladesh were not well integrated with reference market in the short-run, while long-run relation was evident. Hence, government should continue to develope transportation infrastructure, storage and credit facilities, avoid sudden restriction on raw jute export, strengthen agricultural prices and marketing information system targeted at both farmers and traders. Government should take urgent initiatives, not for shutdown the public jute mills, but for restructuring these mills to produce only spinning jute yarns/twines. Major initiatives such as frequent trade fairs, exhibitions and fashion shows of more value added DJPS at home and abroad should be taken by the private sector mainly and government has to provide necessary policy support for growing up the industry into a huge foreign currency earner by grabbing new and unexplored foreign markets of these products.