Analysis of Growth and Instability of Jute in Bangladesh

Abstract

The study attempts to examine growth and instability regarding various parameters of jute and jute goods in Bangladesh. Time Series data covering the period of 1981-82 to 2009-10 was used for the study. The growth rates were estimated by fitting exponential function and the instability index was used for better reflect the true instability situation. The study found an increasing growth trend of jute production (0.2%) and yield (1.7%) in post-trade liberalization period in spite of significant negative growth of area (1.5%). Growth of harvest time real price of raw jute and quantity exports and prices of raw jute and jute goods at world market showed positive trends in the same period. Moreover, instability in area, production, yield and harvest time price of raw jute also decreased remarkably in post-trade liberalization period. In contrast, internal consumption of jute goods decreased significantly in post-trade liberalization period, which might be due to the wide expansion of cheaper synthetic substitute usage over the previous period. Lower growth was observed for jute goods export compared to raw jute and it might be due to the stiff competition against cheaper synthetic substitutes of the world. Moreover, export prices of raw jute and jute goods in real term found more unstable in post-trade liberalization period. To avoid entire dependency on export market and to ensure more domestic consumption for bringing stability to raw jute and jute goods prices, mandatory use of jute goods in packaging act must be implemented immediately.