14 Jute Mills Close in Hooghly on May 19 Due to High Raw Material Costs

At least 14 jute mills in the Hooghly area have stopped work today. This is a big problem because raw jute costs are now 300% higher than the government price.
By Newsroom | Business, India |

At least 14 jute mills across the Hooghly industrial belt have ceased operations or severely restricted production as of May 19, 2026. The Indian Jute Mills Association (IJMA) reports that the sector is paralyzed by a severe shortage of raw material and an unsustainable cost structure. Industry operators state that current regulated prices for B-Twill sacking—mandated by the government—are failing to track the sharp surge in raw jute market rates, leaving mills unable to sustain operational expenditures or worker wages.

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MetricStatus / Value
Active Disruption14+ mills (suspended/curtailed)
Market BenchmarkRs 17,100 per quintal (as of May 6)
MSP for Raw JuteRs 5,650 per quintal
Regulatory StatusZero-stock mandate until June 30

The Price Wedge

The economic stability of the industry is currently compromised by a stark disparity between input costs and government-enforced output prices. While the Minimum Support Price (MSP) is fixed at Rs 5,650, market benchmarks—formerly published by the Jute Balers’ Association (JBA)—hit Rs 17,100 per quintal by early May, a rise of over 300% relative to the MSP.

Read More: Why AI companies face a business collapse in May 2026

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  • The Jute Commissioner’s Office (JCO) enforced a 'zero-stock' directive on traders and balers starting May 5, intended to flush out raw materials for struggling mills.

  • The JBA stopped publishing its quotation index on May 7 following these trade restrictions, effectively stripping the market of its primary reference price.

  • Industry sources argue that the current government-notified prices for jute bags are at least 10–12% below the actual cost of production.

Structural Vulnerability

The crisis is not recent, but has evolved into an acute state over the last six months. Previous appeals by industry bodies and political representatives to both state and central authorities have struggled to bridge the gap between agrarian support for jute farmers and the industrial necessity for affordable raw material.

"Jute mills are curtailing shifts or suspending operations due to unaffordable raw material costs and acute working capital stress," stated correspondence from industry representatives earlier this year, highlighting that the disruption impacts over two lakh direct employees.

The industry is currently awaiting a tangible shift in mill-gate availability before the end of May. As the new jute year approaches on July 1, the lack of a working buffer stock—a condition noted in early 2026—continues to amplify the volatility in the Hooghly belt, threatening the packaging supply chain for food grains and sugar.

Raw Jute Market | IJMA Industry Concerns | Supply Chain Volatility

Frequently Asked Questions

Q: Why did 14 jute mills in the Hooghly belt stop working on May 19, 2026?
These mills stopped production because the cost of raw jute is too high. The market price reached Rs 17,100 per quintal, which is much higher than the government-set price for jute bags.
Q: How does the government price rule affect jute mill owners?
The government sets a low price for selling finished jute bags, but the cost to buy raw material is very high. This makes it impossible for mills to make a profit or pay their workers.
Q: Who is affected by the closure of these 14 jute mills?
More than two lakh workers are affected by these closures. The situation also threatens the supply of bags used to pack food grains and sugar.
Q: What is the 'zero-stock' rule for jute traders?
The Jute Commissioner’s Office started a 'zero-stock' rule on May 5 to force traders to sell their raw jute. This was meant to help mills get materials, but the market remains unstable.