For centuries, jute has been an integral part of culture of Bengal, in the entire southwest of Bangladesh and some portions of West Bengal. During the British Raj in the 19th and early 20th centuries, much of the raw jute fibre of Bengal was carried off to the United Kingdom, where it was then processed in mills concentrated in Dundee. Initially, due to its texture, it could only be processed by hand until it was discovered in that city that treating it with whale oil, it could be treated by machine[1] The industry boomed , but this trade had largely ceased by about 1970 due to the appearance of synthetic fibres.
Margaret Donnelly, a jute mill landowner in Dundee in the 1800s, set up the first jute mills in Bengal. In the 1950s and 1960s, when nylon and polythene were rarely used, one of the primary sources of foreign exchange earnings for the erstwhile United Pakistan was the export of jute products, based on jute grown in then East Bengal now Bangladesh. Jute has been called the "Golden Fibre of Bangladesh." However, as the use of polythene and other synthetic materials as a substitute for jute increasingly captured the market, the jute industry in general experienced a decline.
During some years in the 1980s, farmers in Bangladesh burnt their jute crops when an adequate price could not be obtained. Many jute exporters diversified away from jute to other commodities. Jute-related organisations and government bodies were also forced to close, change or downsize. The long decline in demand forced the largest jute mill in the world to close in Bangladesh. Bangladesh's second largest mill, Latif Bawany Jute Mills, formerly owned by businessman, Yahya Bawany, was nationalized by the government. Farmers in Bangladesh have not completely ceased growing jute, however, mainly due to demand in the internal market.
Jute has entered many diverse sectors of industry, where natural fibres are gradually becoming better substitutes. Among these industries are paper, celluloid products (films), non-woven textiles, composites (pseudo-wood), and geotextiles.
In December 2006 the General Assembly of the United Nations proclaimed 2009 to be the International Year of Natural Fibres, so as to raise the profile of jute and other natural fibres.