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COMMITTEE ON
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JOINT MEETING OF THE
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Rome, 7-9 December 1998 |
REVISION OF COMMODITY PROJECTIONS TO 2005:
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II. RESULTS OF ANALYSIS OF DATA ON DIVERSIFIED PRODUCTS FROM JUTE, KENAF AND ALLIED FIBRES
1. The Intergovernmental Group on Jute, Kenaf and Allied Fibres at its Thirty-first Session in November 1997 reviewed the longer-term prospects for the world jute and allied fibres economy on the basis of Secretariat document CCP: JU 97/3, "Commodity Projections to 2005: Jute, Kenaf and Allied Fibres". While the Group considered the document to be a useful basis for further analysis of the longer-term prospects for these fibres, it felt that projected demand may have been underestimated particularly with regard to prospects for a rapid expansion in demand for fibres for diversified products. In view of this, the Secretariat analysed trends in the market for diversified products on the basis of data supplied by the main producing and exporting countries of these products. The Group also requested that details of the methodology used and the assumptions made to undertake the projections be included in the projections document. These have been provided in Section III of this document.
2. The attempt to diversify the use of jute has met with considerable success over the last decade and a large number of products are already on the market while others are being developed. Products which have already shown success in the market include fine yarns, decorative fabrics, shopping bags, wall hangings, carpets and jute-based floor coverings. Other products, including geotextiles, paper and paper pulp and moulded products for door panels and automotive components, are considered to have market potential in the future. Besides these, there are good prospects for blended fabrics for denim, non-woven products and plastic-reinforced rigid materials for packaging.
3. The development of new products has been assisted by a number of institutions, and in India particularly through the National Jute Development Programme sponsored by the United Nations Development Programme (UNDP). Under this programme, UNDP provided US$20 million while an equivalent amount was made available by the Government of India for development of diversified products. The programme was initiated in 1992 and is to be terminated by the end of 1998.
4. In terms of volume, exports of various diversified products account for a relatively small share of jute and jute product shipments. However, in terms of value, exports of these products from India, the largest supplier, rose to about US$17 million in 1996/97 from some US$6 million in 1993/94. These exports consisted mainly of floor covering materials, including all-jute pile carpets, followed by hand bags and shopping bags and decorative fabrics (see Table I). In the case of Bangladesh the dominant diversified products exported are all-jute pile carpets, shopping bags and geotextile products.
| Table I: Values of exports of diversified products from India | ||||
1993/94
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1994/95
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1995/96
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1996/97
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(.....in million US dollars.....) |
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| Decorative fabrics
Floor coverings Gift articles Shopping bags Wall hangings Blankets |
0.13
2.58 0.56 1.78 0.87 0.00 |
0.33 5.62 0.70 4.43 1.73 0.01 |
1.22 7.83 0.66 3.94 1.16 0.04 |
1.56 8.04 0.53 5.78 0.91 0.08 |
| Total | 5.92 |
12.82 |
14.85 |
16.90 |
5. By the year 2005, exports of diversified products from India, based on past performance, are projected to rise to some US$40 million at 1998 prices; in terms of volume they would probably amount to about 20 000 tonnes. Exports of diversified products from Bangladesh, are expected to increase to some 15 000 tonnes in 2005 from about 8 000 tonnes in 1997, and in terms of value they could amount to about US$25 million. The projected volume of exports of diversified products from India and Bangladesh in 2005 would thus account for about five percent of the total volume of their exports of jute products, and an estimated eight percent of their value.
6. The results of this detailed analysis will be incorporated in an FAO publication on Agricultural Commodity Projections to 2005 to be published in 1999.
7. The projections have been based on past trends and assume normal weather conditions. In general, area is assumed to decline or at best remain stable reflecting general land scarcity and relatively low grower prices of jute and kenaf compared to those of competing crops. These developments in area would be partially offset by higher productivity.
8. Consumption of jute is mainly dependent on price competitiveness of packaging materials manufactured from the fibre relative to alternative packagings, including synthetic materials, and on trends in the introduction and extension of bulk handling facilities, when jute packaging is replaced. It is expected that even in the major jute producing and exporting countries competition from synthetics will continue to intensify, dampening growth of domestic jute markets, except where policies operate in favour of the domestic jute industry. Nevertheless, the increasing concentration of jute consumption in the producing countries themselves is expected to continue, resulting in a long-term downward trend in the share of global production being traded internationally. Although a rise in exports of diversified products would partly offset this trend, their recent fast growth rates may not be sustained. Moreover, in volume terms they would continue to account for only a minor proportion of the total supply of jute.
9. In the period to the year 2005, it is assumed that the current high growth rate of polypropylene manufacturing capacities will continue, driven by lower costs from more efficient technologies in production processes. Supplies of polypropylene would continue to be ample, at relatively low prices, and jute fibre would tend to be further displaced by synthetics in a number of applications. However, given certain technical advantages of jute, the rate of shift to synthetics would be slower than in the past, particularly in the seventies when the impact of competition from synthetics was very strong.