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China

Jute and kenaf output: In the past five or six years, China’ s planted area and output of jute and kenaf have been basically stable with the planted area standing between 150 000 and 180 000 hectares and the annual jute and kenaf output standing at about 400 000 tonnes. Judging from China’ s demand for raw jute and kenaf in 1998, the annual domestic demand for jute and kenaf is expected to hover between 300 000 and 350 000 tonnes. Taking into consideration China’ s domestic situation, its potential for expanding jute and kenaf production and actual needs, the jute and kenaf textile industry of the country will continue to use Chinese jute and kenaf as the main source of their raw material. 

Therefore, our estimate is that in the next 10 years, China’ s annual jute and kenaf output will generally approach the annual jute and kenaf demand and it may stand around 300 000 tonnes per year.

Jute and kenaf imports and exports: In 1997 and 1998, the Chinese government raised the state purchasing prices for jute and kenaf on several occasions due to the effect of the state grain policy and the domestic market price and quality of raw jute and kenaf. This led to China importing increased quantities of jute and kenaf, as the domestic price became higher than the world price. Imports reached 165,800 tonnes in 1997 and 102 000 tonnes in 1998. This high level of imports is likely to be temporary because of the following reasons:

Firstly, the high level of jute and kenaf imports in 1997 and 1998 was not due to inadequate jute and kenaf output in the country. It was mainly due to the higher domestic price of lower-quality Chinese jute and kenaf. As a result, the Chinese jute and kenaf textile mills preferred to use imported fibre, which was lower in price and better in quality. With large amounts of Chinese jute and kenaf stockpiled, prices will inevitably come down Chinese jute and kenaf textile mills in the long run will have to use Chinese jute and kenaf as their major source of raw material and China’ s imports of jute and kenaf will inevitably decrease.

Secondly, gunny bags make up about 80 percent of the output of Chinese jute and kenaf textile mills at present. Domestic consumption of gunny bags will therefore be the decisive factor in determining domestic demand for jute and kenaf. The large jute and kenaf imports in 1997 were due to the adjustment of grain policy, which resulted in big increase in the demand for gunny bags. During the past 15 years, however, the demand for gunny bags both in China and the world has shown a declining trend. This trend is irreversible. In fact, China’ s output of gunny bags in 1998 had exceeded the domestic demand, and the downward trend is likely to be resumed once the short-term boost in consumption has passed.

Therefore, China’ s imports of jute and kenaf are likely to decline year by year in the long run. It is estimated that by the year 2010, China’ s annual imports of jute and kenaf will be between 10 000 and 20 000 tonnes.

On the other hand, China has lost its advantages in jute and kenaf prices and quality for export to the world market. There will be more difficulties for China to export its jute and kenaf. Our estimate is that in the next 10 years China’ s exports of jute and kenaf can hardly exceed 5 000 or 10 000 tonnes per year.

China’ s demand for gunny bags: China’ s demand for gunny bags has declined almost year by year in the past few years except for a few exceptional years. It is generally believed that annual demand for gunny bags stands at 300 million (some experts estimate it is only 200 million). China’ s demand for gunny bags will further decline along with the adoption of bulk transport for grain and the use of substitutes such as plastic bags. By the year of 2010, China’ s demand for gunny bags may be only around 20 000. Moreover, China’ s imports and exports of gunny bags showed a declining trend in recent years, and, in 1998 were about 5 million each. We believe that this trend will continue.

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