• Credit: thehindu.com

    The Centre has mandated the packaging of 100% of foodgrain and 20% of sugar in jute bags for 2018-19 but has also left the window open for the dilution of the order. This includes a stipulation on placing 10% of the orders through reverse auction on the government e-marketplace.

    The order follows the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act (JPM), which was enacted in 1987 to protect the jute sector from the plastic packaging segment.

    While West Bengal and Andhra Pradesh are the two largest jute goods producers, Punjab is the largest procuring State. It plans to initiate the procurement on a trial basis for 10% of the indents.

    Gunny bags now account for about 63% of raw jute consumption, according to official statistics. The sector employs about 3.7 lakh mill workers directly besides supporting several lakh farmer families. Since 1987, the JPM Act has been mandating compulsory use of sacks in certain areas to bring buoyancy to the raw jute market.

    Seepage issue

    While initially there was reservation for sugar, cement, fertiliser and foodgrain packaging over time, certain sectors have been taken out of the ambit for various reasons, including market demand for alternative packaging as there was seepage of materials through gunny sacks.

    This is the first time since 2012-13 that 100% reservation had been announced for foodgrain. It was 90% last year.

    In 2018-19, the total quantity of bags manufactured by the mills is anticipated to be 9.3 lakh metric tonnes. In view of the increased kharif production and assuming the requirement for the rabi season would be maintained at last year’s level, the requirement is pegged at 7.5 lakh MT of jute bags for foodgrain packaging.

    In case of sugar, the government has stipulated that diversified jute bags be used as traditional bags are not being preferred by the user-sector due to contaminants like jute fibre, batching oil moisture pick-up and sugar spillage. The recent order is effective from November 30, 2018 to June 2019.
    Jute bags auction

    For quite sometime, the government has been keen to introduce a system for auction or reverse auction for selling jute bags through the national e- procurement portal of the government. However, these attempts have not been very successful as jute bags are under an administrative price control system and mills do not quote below the declared price.

    Keen to roll out the auction system, the government has said to the extent that jute mills fail to supply through the government e-marketplace portal, the Union Textiles Ministry (the industry’s parent Ministry) will allow dilution if the mandatory packaging norm, modifying it to incentivise jute mills’ participation in the government e-market place

    Dilution would also be made if there is disruption in supply of jute packaging material. Similarly, jute mills will also get relief if there is bunching of orders . The Ministry has also kept outside the purview of the order export consignments, small consumer packs of 10 kg and below for foodgrain and 25 kg and below for sugar, bigger packs of more than 100 kg and sugar fortified with vitamins.

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