Sugar mills have sought complete exemption from packing in jute sacking bags for 2017-18. The industry says sugar as a commodity is unsuitable for packaging in jute bags and hence, should be relieved from the compulsory Jute Packaging Materials Act (JPMA), 1987, as has been done for cement and fertilisers in the past. As of now, 20 per cent of the sugar has to be compulsorily packed in jute bags.
Sugar mills have argued that the industry has to bear an additional burden of Rs 350 crore if the mandatory jute packaging order is continued for 2017-18. This concern is based on the premise that on an average, the price of jute sacks is up to 2.5 times more than high-density polyethylene (HDPE) bags. A 50-kg HDPE bag costs Rs 15-16 compared to Rs 50-51 of a jute sacking bag of the same capacity.
Abinash Verma, director general, Indian Sugar Mills' Association (ISMA) said, "We have appealed to the textiles ministry to remove sugar from the list of mandatory jute packaging. There is a scarcity of jute bags even for packing food grains, and the ministry has admitted it. Besides, jute bags are not suitable for packing sugar due to issues like moisture contact and contamination by jute fibres. Our customers like beverages and chocolate manufacturers do not want sugar packed in jute sacks."
He cited Bangladesh's example where there is no compulsion to pack sugar in jute bags.
"Bangladesh is the largest producer of jute. Yet, it is not mandatory to pack sugar in jute bags. That makes their jute industry competitive compared to India where the industry is driven by sacking and there is no diversification", said Verma.
According to ISMA, production of food grains and sugar has expanded but raw jute output has not grown commensurately to match the demand. Between 2004-05 and 2015-16, food grains and sugar production has risen by 33 per cent and 98 per cent, respectively. Raw jute production in the same period has tanked by 14 per cent. Bulk consumers of sugar like beverages makers, biscuit manufacturers, confectioners and pharmaceutical companies are reluctant to accept sugar packed in jute bags as they do not want jute fibres to mix with their products. Moreover, batching oil released from jute bags is not suitable for human consumption.
Both the Rangarajan committee and the Commission for Agricultural Costs & Prices (CACP) have recommended for complete removal of sugar from JPMA's ambit.
The Indian Jute Mills' Association (IJMA) denies the case for the shortage in jute bags supplies. At a recent meeting of the textiles ministry's standing advisory committee, IJMA said the jute industry can consume eight million bales and has sufficient capacity to cater to the requirement of food grains, sugar and the private market. It has pitched for 100 per cent packaging of food grains and sugar in jute bags.
IJMA chairman Raghavendra Gupta was not immediately available for a comment.