THE Union Ministry of Consumer Affairs, Food and Public Distribution and the Textiles Ministry are engaged in a tussle over the recent announcement of a price ceiling on raw jute.
According to Mr Kailash Gupta, Managing Director of National Multi-Commodity Exchange of India Ltd (NMCE), senior officials of the Ministry of Consumer Affairs are in touch with their counterparts in the Textile Ministry.
On December 14, this year, the Jute Commissioner, who is based in Kolkata, announced that Rs 1,468 a quintal was the ceiling price of raw jute.
Mr Gupta said such an announcement was strictly against the principles of a free market.
NMCE immediately suspended raw jute futures at its exchange. The other multi-commodity exchanges followed suit.
Raw jute futures is one of the highest volume generators of NMCE.
The Jute Commissioner was forced to make such an announcement because raw jute prices were skyrocketing and it meant that prices of jute bags would also be heading north.
Further, this being the season when several government agencies are busy buying huge quantities of jute bags for storing the rabi crop, the Jute Commissioner's office used its special powers to declare the price ceiling. Raw jute is still treated as an essential commodity.
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