Sugar Industry Demands Full Jute Packaging Exemption, Citing Health Risks and ₹800 Crore Annual Cost Burden

The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF) have jointly petitioned the government to grant sugar a 100 per cent exemption from compulsory jute packaging under Section 4 of the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, for Jute Year 2026–27.

The two bodies have also demanded that mandatory jute packaging for sugar be suspended entirely until an independent expert study — already ordered by the Standing Advisory Committee (SAC) in October 2025 — is concluded. The SAC had responded to earlier industry concerns by reducing the mandatory jute packaging share for sugar from 20 per cent to 15 per cent on an interim basis, acknowledging that existing norms warranted reconsideration.

The central plank of the industry's argument is a public health one. Jute used in packaging is treated with jute batching oil (JBO), a petroleum-derived compound whose polycyclic aromatic hydrocarbon (PAH) content has been identified — both scientifically and judicially, according to ISMA and NFCSF — as carcinogenic.

The industry bodies warn that JBO residues can migrate from jute bags into sugar during storage and transit, creating a direct health hazard for end-consumers, including children and pregnant women.

It was precisely these concerns that prompted the SAC, in October 2025, to commission an independent expert study drawing on representatives from AIIMS, FSSAI, the Bureau of Indian Standards (BIS), and the Jute Commissioner's office. The industry's position is that until that study delivers a clear finding, no mandatory jute packaging requirement for a food commodity like sugar can be justified.

Beyond health, the industry points to a fundamental materials incompatibility: sugar is highly hygroscopic — it readily absorbs moisture from its environment — while jute inherently retains moisture. The combination, the joint statement argues, accelerates caking, lump formation, and shelf-life deterioration, directly harming product quality.

The economic dimension is equally stark:

• Jute bags cost 2.5 to 3 times more than available alternatives such as polypropylene woven (PPV) bags.
• This differential translates into an estimated ₹800 crore in additional annual costs for the industry.
• The financial burden ultimately cascades down to over 5 crore sugarcane farmers across the country.

The Commissioner for Agricultural Costs and Prices (CACP) is reported to have separately flagged the compulsory reservation system on the grounds that it leaves inadequate raw jute for diversified, higher-value end-uses such as shopping bags and home décor products.

ISMA Director General Deepak Ballani made the industry's position unambiguous, arguing that sugar reaches every Indian household and cannot continue to be packed in bags treated with a petroleum-based carcinogen while a SAC-directed study remains in progress.

NFCSF Managing Director Prakash Naiknavare broadened the argument, contending that exempting sugar from mandatory jute packaging would serve a dual purpose: protecting product quality and consumer health on one side, while simultaneously freeing up raw jute supplies for the diversified, value-added products that he said could genuinely secure the jute sector's long-term growth prospects.

Together, the two statements signal that the industry is positioning this not as an attack on the jute sector but as a reorientation of policy that could benefit both industries — provided raw jute is redirected away from food-contact applications toward higher-value non-food uses.