Md. Sahidul Islam (Sumon) : Few commodities are as deeply woven into the history, literature, society and culture of the Indian subcontinent as jute. The image of rural Bengal, its rivers and the sweat-soaked lives of its farmers is inseparable from this crop. Jute is not merely an agricultural commodity; it is part of the identity and economic heritage of this region. Once the backbone of the economy of erstwhile East Pakistan and later independent Bangladesh, and a major source of foreign exchange, jute earned the enduring title of the “Golden Fiber.”

Yet, by the closing decades of the 20th century, the global market changed dramatically with the rapid expansion of cheap plastic, polythene and synthetic fibers. Facing intense international competition, many of Bangladesh’s historic jute mills were gradually shut down, while the sector lost much of its prominence in national economic planning. Even today, however, jute remains critically important. It supports the livelihoods of tens of millions of people directly and indirectly, sustains rural economic activity and retains significant relevance in global trade.

After nearly four years of multiple challenges, domestic production constraints and weak global demand, Bangladesh’s jute sector recorded a welcome improvement in the recently concluded fiscal year 2025-26. According to recent figures from the National Board of Revenue and the Export Promotion Bureau, exports of jute and jute products reached around $880 million, equivalent to roughly Tk 10,500 crore, the highest level in three years.

At first glance, this appears to be encouraging news. But a closer look at the numbers reveals a more complicated reality. Export earnings increased by around 7.75 percent, yet the physical volume of shipments did not rise. In fact, export volumes declined across most major product categories.

This distinction matters. In international trade, export growth generally comes through two channels: an increase in the quantity of goods exported or an increase in their unit prices. Bangladesh’s jute sector appears to have benefited primarily from the second.

Jute yarn remains the dominant component of Bangladesh’s jute exports. During the last fiscal year, earnings from jute yarn rose by 18 percent to $490 million. Yet export volume declined by around 2 percent, from 438,000 tons to 428,000 tons. Similarly, exports of jute sacks and bags generated $130 million, registering around 5 percent growth in value, even though shipment volumes also moved downward.

The picture is even more concerning for raw jute and diversified jute products. Raw jute export earnings fell by 11 percent to $130 million. More strikingly, export volume plunged by nearly 77 percent, from 167,000 tons in the previous fiscal year to only 38,000 tons. Meanwhile, exports of diversified jute products—the segment that holds the greatest promise for the future—also declined by 11 percent to just $74.4 million, accounting for less than 10 percent of total jute export earnings.

What explains this apparent contradiction between rising export earnings and falling shipment volumes?

One major factor was the sharp increase in the domestic price of raw jute. Last season, major jute-producing districts such as Faridpur, Rajbari, Jashore, Pabna and Rangpur were affected by adverse weather, excessive rainfall and unexpected flooding. Production suffered, reducing the availability of raw jute in the domestic market.

As supply tightened, the price of raw jute reportedly rose from around Tk 3,000-3,500 per mound to Tk 5,500-6,000. This had a direct impact on the processing industry. Higher raw material costs pushed up production expenses, leaving exporters with little choice but to increase prices in international markets.

In other words, a product that might previously have been exported for around $1,200 had to be sold for $1,400-$1,500 simply to absorb higher input costs. The result is higher export earnings on paper, but lower physical exports. This should not be mistaken for healthy or sustainable export growth.

The sector is also being squeezed by global geopolitical tensions, regional conflicts and economic uncertainty. Bangladesh exports jute and jute products to markets including Turkey, China, India, Egypt, Uzbekistan, Indonesia, Morocco, the United Arab Emirates, Jordan, Pakistan, Russia and Iran. Disruptions in the Red Sea and instability in the Middle East have contributed to higher shipping and container costs, while elevated fuel prices have further increased transportation expenses.

The impact has been particularly visible in the European Union, one of the major destinations for Bangladesh’s diversified jute products. As inflation has squeezed household purchasing power, European consumers have reduced spending on non-essential and decorative goods, weakening demand for some Bangladeshi jute products. At the same time, Bangladesh continues to face a major competitive disadvantage in India, where anti-dumping duties have been imposed on certain Bangladeshi jute products, particularly yarn and sacks, since 2017.

Yet the global outlook for jute is not entirely bleak. On the contrary, the long-term opportunity may be greater today than at any point in recent decades.

The climate crisis and growing concern over plastic pollution are creating new markets for environmentally friendly alternatives. Jute shopping bags, technical textiles, geotextiles, garment accessories, gardening products, automobile interiors and sustainable packaging all offer significant opportunities. Jute sticks also have potential as a raw material for processed charcoal, with applications in water purification and cosmetics in markets such as China, Japan and South Korea.

Some estimates suggest that with the right policy support, technological upgrading and strategic roadmap, Bangladesh could potentially increase annual jute and jute-product export earnings to as much as $5 billion.

But unlocking that potential requires breaking away from the traditional business model. Bangladesh’s jute export basket remains heavily concentrated in relatively low-value products such as yarn and sacks. Profit margins are thin, and even modest fluctuations in raw material prices can push exporters towards losses.

Competitor countries such as China and India have moved further into high-value diversified products through technological innovation, research and development, blended fabrics and efficient manufacturing processes. Bangladesh, meanwhile, remains excessively dependent on traditional, raw-material-intensive products.

This is where policy must make a decisive difference.

First, agriculture and industry need to be better integrated. Farmers should have access to high-yielding, affordable and quality jute seeds, while modern and environmentally sustainable ribbon-retting technology should be expanded to improve fiber quality. The government must also ensure greater transparency in the raw-jute market and take effective action against artificial shortages, hoarding and syndication.

Second, Bangladesh needs a world-class research and development ecosystem for diversified jute products. Public institutions, universities and private businesses should collaborate on new designs, textile technologies, product development and international quality standards. Foreign direct investment should be encouraged to facilitate technology transfer, modern manufacturing and access to global marketing networks.

Third, Bangladesh must diversify its export destinations. Excessive dependence on European and Middle Eastern markets leaves the sector vulnerable to regional disruptions and shifts in consumer demand. Greater attention should be given to emerging markets in Latin America, Africa and East Asia.

At the same time, Bangladesh should pursue stronger diplomatic and legal efforts to address discriminatory trade barriers, including anti-dumping measures affecting its jute products in India. Domestically, the government should strictly enforce the Mandatory Use of Jute Packaging Act 2010. A strong domestic market can provide a reliable cushion when international demand weakens.

The golden fiber should not become merely a symbol of Bangladesh’s economic past. The global transition towards a greener economy offers jute a new lease on life. But higher export earnings caused largely by higher prices should not be confused with genuine structural growth.

The real challenge is to move from exporting more expensive traditional products to producing and exporting higher-value, technology-driven and diversified jute goods.

With institutional reform, technological modernization, stronger research capacity, market diversification and coherent policy support, Bangladesh can once again place jute at the center of its economic strategy. The opportunity is there. What is needed now is the political will, investment and long-term vision to turn the Golden Fiber from a story of nostalgia into a story of sustainable economic transformation.

Md. Sahidul Islam (Sumon) is an economic analyst, columnist, and CHT Affairs Researcher. Email: [msislam.sumon@gmail.com]