Effect of COVID-19 Pandemic on the Market Price of Jute in India

Abstract

Jute is an important natural fiber crop cultivated in about 4 million hectares in India. Jute has the major export potential contributing to Rs.1, 000 to 1,200 crores annually. During the on-going pandemic COVID-19, the procurement is still lesser than the usual amount. As a result of the increase in demand for jute bags, there was an increase in the price of jute bags. But, the effect of COVID-19 on the prices of raw jute in the markets was not explored as most of the concerns are directed towards the jute industry and workers. Therefore, the study was carried out to assess the effect of COVID-19 pandemic on the market price of jute. The secondary data of market price and market arrival of jute before COVID-19 pandemic and during COVID-19 pandemic were collected from the official website of the Directorate of Marketing & Inspection (DMI), Ministry of Agriculture and Farmers Welfare, Government of India for Champadanga (Hooghly), Jiaganj (Murshidabad), Katwa (Burdwan) markets in West Bengal and the data were analyzed using descriptive and inferential statistics. Despite the price decrease during the pandemic, there was no significant difference in the price of jute before and during the COVID-19 pandemic. There were many variations in the market price of jute during the COVID-19 pandemic since the lockdown was enforced in five stages with strict restrictions in transport and other activities in the initial stages followed by relaxation in transport and other activities subsequently. There was a significant difference in the market arrivals of jute before and during the COVID-19 pandemic. The arrival of jute in the market increased during COVID-19 compared to before COVID-19 because of the demand created for jute bags during lockdown due to closure of jute mills. There was a significant relationship between market price and market arrival during the COVID-19 pandemic. As the quantity of jute arrival increases the price of jute decreases in the market. Farmers did not bear the brunt of COVID-19 as much as the workers in the jute mills, it is, perhaps, because of the schedule of sowing and harvesting. As of now, the MSP for jute is less than the market price. Therefore, it is recommended that the MSP for jute should be increased to safeguard the interests of the jute farmers.