Market Statement

Market Statement

98%+ of the world’s jute grows in Bengal. 100% suitable for rope-weight yarns.

In March 2020, the COVID-19 pandemic hit just before planting. In May 2020, catastrophic tropical super cyclonic Storm Amphan devastated the crop. Many yarn mills were damaged or destroyed and 120,000+ jute workers laid off.

With little available product, prices peaked in March 2021 over 600% higher than 2018. Many mills went bankrupt. Farmers began planting alternative crops giving better profit yield.

With a lack of supply, consumers switched to alternatives, eg. Van de Wiele carpet backing from CRT, CRX, CRM, etc. VOT–batched jute to synthetic materials. Significantly less of these yarns are being manufactured. Regional demand for sacking and Hessian increased to fill the 2020 shortfall.

With a better 2021 season, jute prices have dropped to 280% higher than 2018 levels. They are not predicted to fall any further.

Mills produce an average 150 tonnes per day. Yarns are commonly supplied in 26 tonnes. Now a strong seller market, bulk customers  command priority. Agents procure minimum order quantities, split and resell with mark-ups. Profit margins are affected by limited supply and high demand.

Bengal is susceptible to the effects of global warming. Large procurers are stock hoarding in expectation of further disasters.

Now there is a global shipping crisis. Container prices have quadrupled with serious delays.

We note that rope-weight hemp yarns from India are also affected by separate weather events. Supply from China is hit by geopolitical issues. Both suffer the shipping crisis. European hemp is spun for textile-weight yarns.

For jute and hemp ropes this is generating a wave–effect. As vendor stocks run out, a predicted supply short-fall and increased prices should be expected.