Raw jute prices continue to rule firm despite Indian govt cutting stock-holding limits

Jute mills in West Bengal sharply cut production after raw jute prices breached the record ₹1,10,000-per-tonne mark in December last year, as traders and stockists were unwilling to release raw jute, anticipating even higher prices
| Photo Credit:
PTI

Jute mills are worried that the Centre’s decision to reduce jute stock limits for traders and balers has not reined in firm prices of raw jute.

The stock limits were lower following a sharp rise in jute prices over the past few months, which are well above the minimum support price (MSP) for 2025-26. Various stakeholders have expressed concerns regarding the availability of raw jute.

“Stock limits alone cannot stabilise prices, if demand remains uninterrupted. Market reacts to actual buying pressure, not announcements,” a jute mill owner told businessline.

Even as raw jute prices showed marginal easing this week, the market remains tense amid “contradictory policy actions”, the mill owner said.

Compelled to buy

According to industry sources, the Office of the Jute Commissioner has already issued production control-cum-supply order (PCSO) for about 1.90 lakh bales for January 2026 delivery, despite it being told at a review meeting earlier that there should be zero PCSO for this month to cool the overheated market.

“As long as January PCSO is in force, mills are compelled buyers. Traders price that in immediately,” an industry executive observed.

The Ministry of Textiles on Tuesday reviewed the issue of high prices of raw jute and decided to enhance its stock limits for mills, while reducing the cap for traders and balers. The stock limits, which were imposed by the Jute Commissioner through a notification in December last year, have been revised to ensure fair distribution, prevent hoarding and speculative practices in the trade of raw jute.

Entities holding stocks exceeding the prescribed limits have been asked to reduce their holdings within 10 days from the issuance of the order, physically deliver the excess to consignees, and submit compliance reports with supporting documentation to the Jute Commissioner’s Office by February 10.

Prices soften a tad

Officials are authorised to inspect premises and records, and to seize excess stocks found in contravention of the government order.

Raw jute prices, which had touched a season-high of Rs 13,500 per quintal on January 18, have softened to around Rs 12,600. According to industry insiders, the correction in prices was triggered not by government orders, but by a letter from the Indian Jute Mills Association (IJMA) to the the Ministry of Textiles, seeking temporary suspension of private raw-jute trade, creating apprehension among traders about possible interventions.

Bangladesh export ban

Jute mills in West Bengal sharply cut production after raw jute prices breached the record ₹1,10,000-per-tonne mark in December last year, as traders and stockists were unwilling to release raw jute, anticipating even higher prices.

Significantly, after Bangladesh abruptly announced a ban on the export of raw jute from September 8, 2025, domestic raw jute prices have experienced an abnormal escalation. In July, the prices stood at Rs 60,000 per tonne.

Amid the continuing price volatility, the Jute Balers Association (JBA) has argued that the current situation is demand-led rather than hoarding-led. It claimed that arrivals between July and December, 2025 were higher than the previous year, mills consumed significantly more raw jute during the same period, and financially strong mills aggressively competed to corner stocks, pushing prices higher.

According to JBA, weaker jute mills with payment constraints have been priced out, while larger mills with ready liquidity have driven the price race.

Published on January 21, 2026