BJMC sells jute sacks at less than official rate
Questions have arisen above Bangladesh Jute Mills Corporation's (BJMC) decision to market 100,000 bales of jute sacks at a cost lower than the state rate as it again is defined to deprive the united states of almost Tk 8 crore found in revenue.
The corporation charged Dubai-based Taif International $87 for every 100 of the jute bags, which are known as Standard B Twill, which is $3 shy of its officially declared price of $90.
The total value of the sale stands at $26.1 million.
The deal occurred on July 30, a day before the beginning of Eid-ul-Azha vacation and it had been done without the data of the BJMC's 87 listed regional buyers, who usually export 80 % of jute goods churned out by the state-owned mills.
"We came to find out about it following the Eid vacation. The BJMC must have educated us before retailing the jute things and granted us the scope," explained Sajjad Sohel, chairman of the Bangladesh Jute Items Exporters' Association (BJGEA).
He said the BJGEA associates had demanded a cut in the price however the state agency didn't pay any heed.
The sale took place a month following the government shut its 25 jute mills, supplying a golden handshake to almost 25,000 long term workers, and at the same time when demand for jute bags is picking up in Sudan merely before its crop harvesting period.
The African nation is the key buyer of Standard B Twill, availing roughly 200,000 bales of jute bags from Bangladesh's public and exclusive mills to pack grains.
Sohel said the BJGEA members were buying every 100 jute bags for $95 to export to Sudan.
The BJMC said the jute bags involved were produced over an interval since 2016 and the stock stood a lot more than 100,000 bales because of sluggish sales.
In a letter to the textile and jute ministry previous month, the organization said Taif International wanted to acquire 100,000 bales at $85 per 100 bags initially. After, both functions settled at $87.
Because of offering the sacks below the state rate, the federal government will be deprived of practically Tk 8 crore, said the BJGEA in a letter to the Federation of Bangladesh Chambers of Commerce and Industry on August 23.
"The BJMC could have benefited had they consulted the BJGEA before offering the whole stock," said Sohel.
BJMC Chairman Md Abdur Rouf said the panel fixed the price.
He said the jute totes had lost excess fat and was susceptible to lose more had they been kept found in storage time more. Besides, mills had been shut and there have been incidents of theft in some mills.
"We need to consider that reality too," he said.
"Would the product quality deteriorate an excessive amount of if the BJMC retains the products for three more a few months?" asked Sohel.
Rouf said the BJMC have been offering the $90 rate for some time and it was waiting for buyers. "None came frontward," he said.
Mushtaq Hussain, managing director of Golden Fibre Trade Center Ltd (GFTCL), among the important exporters of the BJMC's goods to Sudan, said his company bought jute goods on July 27.
The GFTCL came to know about the deal on August 4. Only your day before it possessed put on the corporation to buy 104,975 bales of the bags at $90.
Later on, it urged the BJMC to cancel the deal as Taif International didn't pay 10 % of the value of the products within three working days from the date of the signing of the agreement.
In a letter to the textile and jute ministry previous month, the BJMC stated according to contract, Taif International could not deposit 10 % of the worthiness of the products by 5:00pm Bangladesh common time on August 5.
The amount of money was deposited on August 6, it said, seeking directive from the ministry.
The ministry, in response, said the BJMC gets the authority to select the marketing of its goods and advised it to take a decision predicated on rules.
Humayun Khaled, a ex - chairman of the BJMC, who penned the contract with respect to Taif International, said there is no issue with the payment.
He said the BJMC wrote to Taif International informing that 10 % of the value ought to be paid by August 6 and that was done.
Khaled explained he represented the Dubai-based firm after ask for from Taif International's chairman.
Asked how a ex - chairman of the BJMC could easily get involved with a deal where in fact the corporation stands to reduce, he said, "This is simply not a loss."
"Why didn't anybody arrive to buy earlier? Just how many times would it take to clear one lakh bales?"
The BJGEA alleged that the BJMC discriminates against enlisted hometown organizations as domestic buyers need to pay 50 % of the worthiness of the goods beforehand whereas international companies pay 10 %.
Rouf said there is not any scope for cancelling the deal.
He said there was a one-day difference regarding the 10 % deposit.
"They informed us that offices opened in Sudan a good day after found in Bangladesh. As such, in Sudan, three business days started from August 4 and ended on August 6. In Bangladesh, the working day began on August 3," he said.
He said the agreement does not specifically condition that the money has to arrive according to the Bangladesh time.
"We have taken legal opinions and legal advisers mention everything was lawful."
"There is a question whether we will gain in international courts if we scrap the contract. If we cancel plus they go for arbitration, we may face an enormous penalty," said Rouf.
Nevertheless, Hussain said the corporation itself had written to the textile ministry informing that the amount of money had not seriously time.
"There is no reference to the name of the key buyer and its address as the sender of the amount of money. The BJMC can cancel the agreement on this ground," he said.
As the written agreement was inked in Bangladesh, the law of the land should be followed, he said.
