Jute: Cycles
Jute or rice? How farmers switch each season
What this tab covers Price history and what drives booms and busts, including this commodity's super-cycles, the drivers behind them and the metrics to track. It charts monthly prices (World Bank) with a switch to inflation-adjusted annual prices; where there is no World Bank series it uses USGS US prices.As an annual crop, jute responds within a season: farmers switch land between jute and rice as relative prices change. Radetzki and Wårell describe this in the 1973 boom, when crop failures pushed land from jute and cotton into grains. They also note that jute supply expanded quickly whenever prices stayed high, which ruled out successful producer cartels. The long trend was decline as polypropylene sacks displaced jute. Plastic-bag bans have revived some demand.
No public benchmark price series for this commodity in the datasets used. Many minor materials trade on private contracts.
Super-cycles in jute
Jute has been in long structural decline since synthetic polypropylene sacks spread from the 1960s, with government policy rather than market booms setting its path. World output was 2.65 Mt in 1961 and 2.67 Mt in 2000 (FAOSTAT), flat while other crops grew. Radetzki and Warell list jute among crops whose supply expands quickly when prices rise, which limits price spikes. Output has recovered to 3.70 Mt (2024), driven by Bangladesh, as plastic bans and India's packaging mandate supported demand. No free long-run price series is published; India's MSP is the clearest price marker.
- 1960s-1980s
Polypropylene sacks and carpet backing displaced jute in export markets, and Bangladesh's output fell from its early-1960s level.
No price series sourced; Bangladesh's output fell from 1.32 Mt (1961) to 0.84 Mt (1990) (FAOSTAT)
- 1987-2010
India's Jute Packaging Materials Act of 1987 forced use of jute for grain and sugar packing, giving Indian mills a protected market and lifting Indian output.
No price series sourced; India's output rose from 1.17 Mt (1980) to 1.80 Mt (2010) (FAOSTAT)
- 2010-2024
Bans on plastic bags and Bangladeshi rules favouring jute packaging lifted demand; Bangladesh doubled output while India's fell.
No price series sourced; Bangladesh's output rose from 0.92 Mt (2010) to 2.09 Mt (2024) (FAOSTAT)
- 2024-2026
The MSP was raised again and JCI expected a larger 2025-26 crop with about 10% more sowing.
MSP for TD-3 jute from Rs 5,335 per quintal (2024-25) to Rs 5,650 (2025-26) (The Week/PTI, May 2025)
What drives the cycle
- India's packaging mandate. Requiring jute for 100% of foodgrains and 20% of sugar sets a floor under mill demand; its annual renewal is the single biggest policy risk.
- Government grain procurement. The volume of wheat and rice bought by FCI and states sets the number of B-twill bags needed.
- Polypropylene prices. Plastic sacks are the main substitute and their cost follows oil and propylene.
- Monsoon and retting water. Rain at sowing and enough water for retting decide both output and grade.
- Bangladesh trade policy. Bangladesh is the largest grower and exporter of raw jute and goods; its export rules and prices affect Indian mills.
Metrics to track
| Metric | Why it matters | Where to track it |
|---|---|---|
| Raw jute MSP and JCI purchases | Floor price and the scale of support buying | Jute Corporation of India; CCEA decisions on PIB |
| Raw jute and jute goods prices | Mill margins and farmer prices | Office of the Jute Commissioner, Kolkata |
| Annual renewal of JPM Act packaging norms | Sets the guaranteed market for jute bags | Ministry of Textiles / PIB |
| Wheat and rice procurement volumes | Drives demand for B-twill bags | Food Corporation of India; Department of Food and Public Distribution |
| World production by country | Long-run supply trend | FAOSTAT |