Coca Cola, GSK, Nestle snub sugar packed in jute bags

n a body blow to the ailing jute industry in the country, major corporates like Coca Cola India, Cadbury, Nestle India and GlaxoSmithkline have outright rejected the supply of sugar in jute bags. These firms have argued that the jute fibres are contaminating the sugar that they use for manufacture of their products.

These corporate majors, have instead opted for supply of sugar packed in plastic bags.

The snub to jute bags by these corporates has come at a time when the Jute Commissioner's Office (JCO) and the Indian sugar industry have locked horns over the availability of raw jute and production of jute bags in 2010-11.

Over the past few months since the peak sugar season started, all the four food and beverage companies have written letters in phases to the Indian Sugar Mills Association (ISMA) expressing their concern over jute sacks and favouring packing their materials in polypropylene sacks.

ISMA in turn has taken up the issue with the Union Textiles Ministry and the Jute Commissioner's Office (JCO) in Kolkata.

ISMA has written to the Textile Ministry and JCO that there will be a major shortage of jute bags in 2010 -11 because of a 26 per cent lower production of raw jute and around 24 per cent less production of jute bags during the year.

ISMA has based its calculation on figures available from the Union Agriculture and Textile Ministry for 2010-11. Almost 70 per cent of the sugar produced in India is consumed by industrial users like beverage manufacturers, biscuit and confectionery makers, food processing industries and sweet meat producers.

According to ISMA, the large corporates have found that jute bags tend to absorb moisture and usually support microbial growth due to the organic nature of the bags.

Moreover, the jute industry is also facing labour shortage and will not be able to meet the requirements of production.

The sugar industry consumes around 0.3 million tonnes of A Twill jute sacks valued at around Rs 1650 crore at the rate of Rs 55,000 per tonne. ISMA has requested the Textile Ministry to relax 25 per cent of jute mandatory packaging order in favour of plastics given the bad condition of jute industry. The Union Government has decided to pack 100 per cent sugar produced in the country in jute bags.

The jute industry has an installed capacity to produce 2.3 million tonnes of jute goods but depending on government and market demand, it currently produces around 1.9 million tonnes with a turnover of around Rs 10,000 crore.

Sugar consumption is only 16.5 per cent both in value and volume terms. The remaining is solely meant for food grains packaging in Kharif and Rabi agriculture season for the government and the market. ISMA's objections have however been rebuffed by the Jute Commissioner's Office (JCO). In a letter to Abinash Verma, the Director General of ISMA, Deputy Jute Commissioner Arti Kanwar said that there is no shortage of raw jute availability or production capacity that may adversely affect the production and supply of jute bags for packing of sugar in the current financial year.

According to Kanwar, the jute crop in 2010-11 is sufficient to produce 1.92 million tonnes of jute goods as the availability of raw jute is about two million tonnes or around 119 lakh bales.

Moreover, under present conditions, the jute industry has the potential and capacity to produce and supply 0.31 million tonnes of 630 gms sugar bags in five months between December 2010 and April 2011.

The sugar industry requires supply of 0.29 million tonnes of jute bags to pack the projected 2.3 million tonnes of sugar in 2010-11.

In her letter to Verma, the Deputy Jute Commissioner said that ISMA has also stated incorrect figures regarding the production of jute sacks. She has also cited examples of the International Jute Organization (IJO) receiving global supports from International Cocoa and Coffee Organizations since 1998 for packing food products in jute bags in countries like USA, European Union and Latin America. Jute bags are also exported for food packing in African and West Asian nations.

source: BS