20 February 2013 07:53 [Source: ICIS news]
By Ajoy K Das
KOLKATA (ICIS)--India's Ministry of Textiles will make higher than planned procurement of high density polyethylene (HDPE)/ polypropylene (PP) woven sacks for food grain packaging as a result of looming strike by jute industry, a ministry official said on Wednesday.
The shortfall in supplies of jute sacks required for harvesting `Rabi' (December 2012-April 2013) crop was estimated to increase to as much as 50% of the required 1.89m bales where one bale weighs about 0.33 tonne, the official said.
Earlier the ministry had estimated that given the production constraints faced by the jute mills, the shortfall will be around 37% of the total demand for sacks but with jute mills heading for indefinite closure, the shortfall was forecast to rise to 0.945m bales (0.312m tonne) or 50% of demand, the official said.
To avert a crisis the ministry was working towards procuring HDPE/PP woven sacks to meet the shortfall created by the jute. Initial plans were to procure 0.67m bales (0.221m tonne), the official added.
A source with a major Indian producer said government’s additional procurement was unlikely to have significant impact on the HDPE/PP prices.
Part of the shortfall in supplies of jute sacks could be met by inventory with jute mills but it was uncertain if the striking workers would allow consignments to move out of the mill premises, the official said.
The Ministry of Textiles has sought inputs from Ministry of Agriculture on estimated food grain crop size of the current harvest and packaging material demand from Food Corporation of India (FCI) to enable it to plan procurement of HDPE/PP woven sacks.
FCI, is the government agency solely authorized to procure food grains from farmers at government determined mandatory support price (MSP).
Under the Jute Packaging Materials Act 1987, it was obligatory for the government to pack 100% of all food grain production in jute sacks but the government diluted the regulation allowing synthetic woven sacks anticipating failure of the jute industry to meet demand.
The trade union operating in 54 jute mills in eastern Indian province of West Bengal and representing 250,000 workers has threatened to go on indefinite strike to protest failure of concluding a wage agreement.
In jute industry, wage agreements were normally concluded through tripartite negotiations between provincial government of West Bengal, trade unions and mill owners.
However, the West Bengal government has not convened any such tripartite agreement meeting and the trade unions were expected to serve any day the mandatory 14 notice to go on an indefinite strike.
The 20 trade unions in the jute industry will be meeting shortly to serve the strike notice including date of commencement of the indefinite strike, sources said.
Additional reporting by Fadhil Muhamad
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