Rice millers have now set their sights on manufacturing jute bags themselves to meet their own demand for packaging and to leverage the newly created demand for eco-friendly bags to pack grains and some other commodities.

For instance, a Kushtia-based rice miller Fresh Agro has already got its sister concern Wadi Jute Mills Ltd to make jute bags.

The company has already set up 20 looms and is in the process of installing another 60 looms to expand production.

“There is a good business prospect. We will be able to supply to other mills after meeting my own requirement. This is also diversifying my business,” said Md Omar Faruk, managing director of Fresh Agro.

Some 5,000-6,000 sacks are required to package rice processed by his family-owned eight rice mills.

From December 2014, the government started enforcing the law to package six commodities including rice, wheat and maize with jute bags with the view to reducing the jute sector's high dependency on the international market.

Rice millers initially were unwilling to use jute sacks because the staple will become costlier as the price of jute sacks was more than double that of plastic bags.

But they later fell in line, which led to a rise in the domestic use of jute, according to the Department of Jute and industry insiders. Jute goods production rose to 9.63 lakh tonnes last fiscal year, up 11 percent from a year earlier, DoJ data show.

Faruk said they initially bought jute bags but decided to jump into production themselves after discovering that there was no mill to make jute bags in Kushtia, one of the main rice hubs. Around 50,000 bags are needed daily in the district, he said.

He sourced jute bags from traders at Tk 52-53 each, but production at his own mill saves him Tk 3 per piece.

Rashid Automatic Rice Mills, one of the leading auto-rice millers, is in talks with a jute mill to make bags to meet its requirement for 12,000 pieces daily, said its owner Md Abdur Rashid. “We want to use the machines to make jute bags based on profit sharing. We are almost in the final stages of negotiations.”

Rashid went on to blame the private sector jute mills for making high profit from jute bags by cashing in on the increased demand as a result of enforcement of the law. 

Within the next one or two years, major rice mills will start to produce jute sacks of their own, he said. Chitta Majumder, managing director of Majumder Group of Industries that operates an auto rice mill, also plans to establish a plant to make bags to break the 'monopoly' of jute mills.

A private jute mill initially charged Tk 44 for a sack, which it later increased to Tk 47. Now, the same bag costs Tk 50, he added. “And we never get as many pieces as we need,” Majumder said, adding that they require 15,000 pieces of sacks per day to package rice and its by-products.

“There is also business prospect as the government is going to make packaging of more commodities mandatory by jute bags.” The Ministry of Textiles and Jute has recently taken a decision to bring 11 agro items -- chilli, onion, ginger, garlic, turmeric, pulses, coriander, potato, flour and rice bran -- under the compulsory jute packaging law.

The latest move is expected to create an additional demand for 7.26 lakh bales or 1.32 lakh tonnes of jute a year, according to an estimate of the DoJ.