Bangladesh’s Jute Industry 2025: Challenges, Growth, and Global Opportunities

Bangladesh remains the world’s second-largest producer and leading exporter of jute and jute products, with the sector contributing significantly to foreign exchange earnings and rural livelihoods. Despite challenges such as fluctuating raw jute prices, export restrictions, and competition from synthetic materials, the industry shows resilience through diversification into value-added products like jute bags, home textiles, geo-textiles, and fashion accessories. Recent government policies, including conditional export permits for raw jute and reinstated export fees, aim to balance domestic supply with international demand. Export earnings declined to $820.16 million in FY25 but show signs of recovery in FY26, driven by increased demand for eco-friendly alternatives globally.

 

 

Market Overview and Production

Bangladesh produces approximately 1.5 million metric tons of jute annually, cultivating it across 1.78 million acres of land, primarily in the flood-prone regions of the northeast. The country holds the second position globally in jute production, after India, and leads in the export of jute goods. With around 291 jute mills—54 of which are currently closed—the industry supports between 50,000 and 100,000 direct jobs, while involving over 4.5 million people across the value chain, including farmers, spinners, and traders. The North Eastern region, particularly areas like Mymensingh and Sunamganj, is renowned for producing the finest quality jute fiber, often referred to as the “golden fiber” due to its luster and strength. Despite its agricultural suitability, jute cultivation faces constraints such as lack of quality seeds, high input costs, labor shortages, and unstable market prices, which discourage farmers from expanding production. The average domestic demand for raw jute stands at about 65 lakh bales annually, while exports account for approximately 14 lakh bales, indicating a surplus that supports export-oriented manufacturing.​

Export Performance and Trends

Jute and jute products ranked as Bangladesh’s second-largest export sector after ready-made garments (RMG), with export earnings reaching $1.16 billion in FY21. However, earnings have declined in recent years, falling to $820.16 million in FY25, marking a consistent downward trend from $1.13 billion in FY22 to $911.51 million in FY23 and $855.23 million in FY24. This decline is attributed to multiple factors, including India’s anti-dumping duties on nine Bangladeshi jute products since 2017, which have blocked approximately $160 million in potential exports. Despite this, jute sacks and bags showed a positive trend in FY25, with exports rising 18.51% to $125.96 million, indicating a shift toward value-added goods. In FY22, total jute exports were valued at $1.13 billion, with jute yarn and twine contributing $697.80 million, raw jute $216.18 million, and sacks and bags $119.23 million. Turkey, China, India, Iran, and Belgium are key export destinations, with Turkey alone importing $148 million worth of jute yarn in 2023. The global demand for sustainable packaging is driving renewed interest in jute, with the international jute bag market projected to reach $3.84 billion by 2026, presenting significant opportunities for Bangladesh.​

 

 

Government Policies and Regulatory Framework

The Export Policy 2024–2027 classifies raw jute as a conditionally exportable item, requiring prior approval from the Ministry of Commerce for export. In September 2025, the government imposed restrictions on raw jute exports to ensure adequate supply for domestic mills, which had been struggling with soaring prices and shortages. However, in October 2025, the Ministry permitted 12 firms to export a total of 2,984 tonnes of raw jute, signaling a calibrated approach to balancing domestic needs with export opportunities. The government also reinstated previous export fees in July 2025, maintaining a rate of Tk 2 per bale for raw jute and 10 paisa per Tk 100 of export value for jute products, after canceling a proposed fee hike that exporters feared would erode competitiveness. Additionally, the Bangladesh Bank extended a loan rescheduling facility for jute exporters until December 31, 2025, to alleviate financial pressures. Despite these measures, industry leaders continue to call for tax waivers, incentives, and diplomatic negotiations to counter Indian trade barriers and enhance global market access.​

 

 

Diversification and Value Addition

Bangladesh produces nearly 300 types of Jute Diversified Products (JDPs), including home textiles, furniture, geo-textiles, fashion accessories, and biodegradable packaging, which offer higher profit margins than traditional sacks and yarn. While traditional jute goods fetch between $1,500 and $1,800 per ton, diversified products can earn between $3,000 and $10,000 per ton, highlighting the economic incentive for value addition. The Jute Diversification Promotion Centre (JDBC) and private enterprises like Corr-The Jute Works and Prokitree Bangladesh are actively promoting innovative applications, such as jute-based composites, footwear, and interior décor. The global market for eco-friendly alternatives to plastic is expanding rapidly, with rising demand in Europe, North America, and Africa for sustainable packaging and lifestyle products. Bangladesh has the potential to export jute stick-based charcoal worth $3.0 to $3.5 billion annually, further expanding its value chain. However, the sector lags in adopting modern technologies and branding, limiting its ability to compete with India, which is perceived as more fashion-forward in global markets. Investment in research, design, and digital marketing is essential to position Bangladeshi jute as a premium sustainable brand.​

 

 

Challenges and the Way Forward

The jute industry faces structural challenges, including outdated machinery, lack of skilled labor, limited access to credit, and weak research and development infrastructure. The closure of 25 government-owned jute mills in 2020 led to massive job losses and social hardship, with many workers still awaiting rehabilitation. The Bangladesh Jute Mills Corporation (BJMC) incurred losses exceeding Tk 1,300 crore between 2020 and FY25, underscoring the inefficiency of state-run operations. While leasing mills to the private sector has revived some production, only 13 of 25 closed mills have been reactivated, leaving thousands unemployed. Smuggling of raw jute to India and inadequate policy coordination further undermine sectoral growth. To unlock its full potential, Bangladesh must prioritize private sector participation, modernize production facilities, strengthen export diplomacy, and invest in branding and innovation. Establishing a dedicated jute research institute and integrating jute studies into university curricula could foster long-term sustainability. With global environmental consciousness rising, Bangladesh’s jute industry stands at a critical juncture—its success depends on strategic policy intervention and a collective commitment to transforming the golden fiber into a modern, competitive, and inclusive industry.​