Sunday, March 27, 2016

Scarcity of Packaging Materials Threatens Non-oil Exports

Non-oil exporters have raised the alarm over scarcity of jute bags used in packaging of cashew nuts and cocoa seeds for export. According to the exporters, over 1.5 million jute bags are required to bag the produce for March 2016 shipping. The President, National Cashew Association of Nigeria, Dr. Tola Faseru, said, “The bags have implications for quality and reputation. In the past, polypropylene bags were used to package cashew but they spoiled the cashew nuts. “We are hoping that jute bags will be brought in quickly because shipment is supposed to start at the end of March.”
An agribusiness strategist, Mr. Sotonye Anga, said the situation had become an emergency.

He spoke on the sidelines of the OG2 conference on export trade in Lagos, adding that there were no jute bags in the country currently. Faseru said the association had approached the Federal Minister of Agriculture and Rural Development, Chief Audu Ogbeh, and obtained promise that something would be done about the situation. Also, the Chief Executive Officer, Nigerian Export Promotion Council, Mr. Segun Awolowo, said the council had contacted the minister on behalf of the exporters and obtained assurance that the issue would be looked into. But Anga told our correspondent that government had yet to come up with a solution to the problem.

According to him, there are fears that people may resort to bagging produce in polypropylene bags, a practice which the cashew association had banned earlier. “People are already considering putting their produce in old jute bags that were used in bagging stock fish. This is not the best practice because stock fish has an odour that can transfer into the produce,” he said. Sotonye said, “Jute bags are crucial packaging materials for cashew and cocoa.  The season has started and people are packaging. They need materials for packaging. “The branding of a product starts with the packaging. One must package it right with the proper jute bags. Otherwise, people will begin to buy fourth-hand and fifth-hand jute bags that are already torn and worn out, which can cause materials to fall out.
“Right now, jute bag prices have escalated. Fairly used jute bags that are poor in quality are sold for as high as N400 per bag.”

Sotonye stressed that the government needed to intervene in the issue of packaging materials for the export sector, adding that it was beyond the private sector. He said, “Government should step in. Ivory Coast, this year, provided four million jute bags for their cashew farmers free of charge. If the government intervenes, the matter will be addressed within 30 t0 40 days. The private sector cannot handle it because of high exchange rates. “Ninety-eight per cent of the jute bags that are used in Nigeria are imported from Bangladesh and India and although Nigeria grows cane and fibre which are the raw materials for making jute bags. There is no jute bag manufacturing company in Nigeria.”
He noted that existing bag manufacturers such as Dangote and Bagco only produced polypropylene bags, which could not be used to package cashew and cocoa. Even if they had to start local manufacturing, the time would be too short, he added.

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