Raw jute prices ranged between Tk 500 and Tk 550 a maund at the growers' level last year but it surged abnormally to Tk 950 a maund during the off-peak season.

Although it is expected that the price will cool down with the arrival of new harvest, production this year is not enough to meet the demand in local and global markets.

"Demand for jute and jute goods is on the rise in the global market and raw jute price is abnormally high this year hitting as high as Tk 1,000 per maund depending on the quality," Shabbir Yousuf, chairman of Bangladesh Jute Spinners Association (BJSA), said.

The average price was Tk 750 a maund last year, said the BJSA chairman, who was on a visit to Kolkata last week, adding that the raw jute price in the West Bengal was also almost the same.

Farmers got good prices of jute in the last two years, Yousuf said identifying hoarding as one of the main reasons for pushing the prices up.

Farmers who went for jute cultivation have been able to make hefty profits, and considering the overall situation as an opportunity, hoarders became active and it pushed the prices further up.

Niamat Ali, a farmer at Galimpur village in Kotchandpur upazila in Jhenidah, made a handsome profit this year cultivating jute on a small piece of land.

"I found around 18 maunds of jute from a land of one and a half bighas. Cultivating jute is not expensive and I made a profit of Tk 9,000 after bearing all the necessary expenditures," he told this correspondent in the second week of November.

"I sold jute at Tk 700 per maund this year, which was Tk 500 last year," Ali explained.

According to sources, local jute production was 40 lakh bales last year against the total demand for around 50 lakh bales.

"Jute prices ranged between Tk 700 and Tk 900 this year depending on the quality. Local production is less than the actual demand and it is the main reason for such price hike," said Farhad Ahmed Akanda, a leader of Bangladesh Jute Association.

According to sources, exports of raw jute and jute goods are on rise in the global market in the recent years while local jute production did not go up due to poor quality of seeds and less interest of the farmers in cultivating the natural fibre.

The country fetched US$307 million and $96 million by exporting jute goods and raw jute in the 2004-05 financial year. During July-September period of the 2005-06 fiscal, jute goods export grew by 14.15 percent and raw jute by 59 percent.

Jute is a neglected sector despite having almost 100 percent local value addition and the farmers fall victims to unstable government policy as they do not get good prices of their produces years after years and are forced to shift to other crops.