Bangladesh Bank’s recent announcement of special loan rescheduling facilities for raw jute exporters has stirred discontent among domestic jute mill owners, who claim the policy is creating a supply crunch and inflating prices for local industries.

On Monday, Bangladesh Bank issued a notification allowing raw jute exporters to apply for loan rescheduling with a 2% down payment on their outstanding loans as of December 31, 2024, accompanied by a two-year moratorium. The deadline for submitting applications to banks has been extended until December 31, 2025.

Earlier, the rescheduling facility required applications based on loan balances as of March 31, 2024, with a six-month submission period. The move aims to ease financial pressure on exporters amid growing demand for raw jute in international markets.

The special facilitation follows a decision by the Ministry of Commerce, which in early September amended the Export Policy 2024–27 to include raw jute in the list of conditionally exportable items, despite it not being on the original policy list.

Following the amendment, exporters faced delays as shipments were held at ports, but permission to export 50,000 tonnes of raw jute was granted after ten days. In October, the ministry approved the export of 2,984 tonnes to 12 domestic firms.

However, domestic jute mill owners and associations—including the Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners Association (BJSA)—warn that raw jute exports are harming local production.

They argue that mills are struggling to procure sufficient raw material at reasonable prices, forcing them to reduce output and, in some cases, delay workers’ wages.

An unhealthy competition over raw jute is underway. This season, no raw jute is available in the local market. Mills are forced to buy bales at Tk 4,000, and now prices have surged to Tk 4,500 per bale,” said Samsul Haque Howlader, owner of a jute mill in Barishal.

BJSA president Tapash Pramanik added, “Exports should only occur after meeting local mill demand. Otherwise, if mills shut down, millions of workers will lose jobs. Yet exporters are using these special facilities to hoard jute for overseas markets.”

According to Export Promotion Bureau (EPB) data, earnings from the jute sector have been declining steadily: USD 911.51 million in FY 2022–23, USD 855.23 million in FY 2023–24, and USD 820.16 million in FY 2024–25.

Business insiders attribute the decline largely to mill closures caused by raw jute shortages, despite the peak harvesting season.

Historically, in 2021, the price per bale exceeded Tk 6,000, compelling mills to halt production. Mill owners say the unregulated export of raw jute is driving prices and production issues once again.

The Bangladesh Bank facility aims to relieve exporters financially, but domestic stakeholders argue that balancing export incentives with local supply needs is crucial to sustain the country’s jute-based industries and protect thousands of jobs.