Prospects for the world jute industry
Prospects for the world jute industry to the mid-1990s are analyzed to identify trends likely to follow the confusion in the jute market originating from the 1984/85 fiber supply crisis. These prospects are derived from analysis of information obtained from surveys of jute demand in several countries and from simulation results from a recently built econometric model of the world jute economy. Jute fiber is used primarily as a textile raw material for making packaging products, carpets, industrial fabrics and twine. Its main demand base is derived from the need to package agricultural inputs and produce in countries where storage and distribution to wholesale and retail markets is in packaged form. Structural changes occurring in the world demand for jute are identified. Prospects for the expansion of jute consumption for packaging uses in developing countries are fairly bright since the scope for early changes to bulk-handling and synthetic substitution are limited. The rapid loss of markets for jute sacks and bags to bulk handling in the industrial countries and grain-exporting developing countries during the 1970s has about run its course. So have the losses of fabric markets where synthetic products held distinct advantages in technical performance or cost. The resulting structural shifts in the regional distribution of consumption and changes in the product composition of final demand suggest that the growth in world demand for jute to the mid-1990s should be somewhat higher than was attained during the 1970s and early 1980s. The sharp output decline in India and Bangladesh in 1984 appears to have started another price/supply cycle. On past performance it is likely that the high prices of 1984/85 will lead to large output increases in the 1985/86 and 1986/87 harvests causing prices to fall and leading to a period of low prices and low output in the late 1980s.
Jute supply response in Bangladesh
This paper uses quantitative methods to identify major factors affecting jute supply in Bangladesh. As well as estimating the impact of the jute-to-rice price ratio on acreage harvested, estimates of the impact on jute supply of weather variations, labor costs, fertilizer availability, value of jute sticks and irrigation availability were also made. The analysis of acreage and yield response was carried out at the district level as well as at the national level to identify district supply characteristics. A distinction was also made between tossa and white jute as the prices paid for these different varieties and the land on which they are grown differ. The potential for jute production in Bangladesh has remained nearly constant for the past 15 years, as increasing yield has offset to a large degree the declining acreage caused by the expansion of irrigation and rice growing. The recent low levels of production were largely the result of low real jute prices during the 1979-82 period and adverse weather conditions. Under higher prices and more normal weather conditions jute supply is likely to expand through increases in acreage and yield.
A Note on Farmer Response to Price in East Pakistan
During the past decade, increasing attention has been given to the role of agriculture in the process of economic development. One aspect of the discussion has concerned the significance of relative prices for farmer in decisionmaking. Recent studies have yielded estimates of supply elasticities for jute in East Pakistan, and for cotton, wheat, and several other crops in West Pakistan, so that a basic body of information is beginning to emerge. The main purpose of this note is to supplement these studies by presenting estimates of the price elasticity of supply for rice in East Pakistan. However, since rice and jute are the main alternate crops in East Pakistan. supply elasticities for jute will also be presented.