ISLAMABAD, July 29: The government has yet to take countervailing measures against the Bangladesh Jute Industry (BJI) for exporting subsidized jute products to Pakistan causing loss to the local jute industry.

Well-placed sources told Dawn on Tuesday that Pakistan Jute Mills Association (PJMA) had filed an application with the National Tariff Commission (NTC) in 2002 against dumping of jute by the BJI.

The BJI is exporting jute goods to Pakistan at subsidized rates since 1998-99 and these imported jute goods and those manufactured domestically were “like products”, said the sources.

According to the sources, Bangladesh offers 10 per cent cash subsidy on export of jute. The threat of injury existed since long, however, sources said, it had increased due to recent reduction in import duty slab by the Pakistan government.

The local industry is capable of satisfying the demand up to 150,000 tons per annum if a level-playing field and fair competitive environment is provided, said the sources.

Immediate measures are needed to save the domestic jute industry from the unfair trade practices of Bangladesh as was done by the government of Brazil by imposing punitive anti- dumping duty on the import of jute goods from Bangladesh.

The jute mills in Pakistan produce hessian, sacking, jute twine and jute yarn.

The annual accounts for last three years of some of the jute mills clearly showed that the mills, which were making profits in 1998, started sustaining losses in the subsequent year, which was mainly on account of suppression of prices of jute goods by the main customers of PJMA. Furthermore, five jute mills had completely closed down their operations and five mills are partially and temporarily closed due to heavy losses.

The accumulated losses of over Rs1 billion were the result of heavy suppression of selling price, said the sources and added the industry made an overall profit of Rs131 million in 1998, which gradually turned into a loss of Rs266 million in 2001. At present the industry was carrying an accumulated loss of Rs1.3 billion, added the sources.

The availability of cheaper jute goods from Bangladesh enabled the customers of the domestic industry to import by calling international tenders and barred the domestic industry from participating in the bidding.

Resultantly, the domestic industry is left with no option but to bring the prices of the locally manufactured jute goods down steeply in order to compete with the subsidized imports and to save the domestic industry from perishing.

The sources said because of the subsidized imports threat the jute industry not only suffered at the hands of its buyers but also the banks were reluctant to give credit, and mills had to sell at a loss to maintain the cash flow for payment of L/Cs against imported raw jute, wages of workers, purchase of spares and payment of electricity bill, the sources said.