Rawhide sector poised to see better days

Arifur Rahaman Tuhin

The government’s decision to allow the export of wet-blue or semi-finished leather this year will likely push up the demand for rawhide of sacrificial animals during this Eid-ul-Azha.

The approval to export of 10 million square feet of wet-blue leather will boost the foreign exchange earnings by at least $7 million to $8 million this year as the current price of wet-blue leather is around 70-80 cent per square foot.

The government has allowed five domestic companies to export wet-blue leather for one year to create a demand for rawhide in the domestic market during Eid-ul-Azha. Industry insiders say the move will put an end to the years-long anarchy in the leather sector.

The five companies are M/S Quader Leather Complex, Kalam Brothers, ASK Investment, Leather Industries of Bangladesh (Unit-2) and Amin Tannery Limited, according to an official of the Ministry of Commerce.

Initially, these companies have been allowed to export 10 million square feet of wet-blue leather, which means each tannery has been allocated a quota of 2 million square feet.

The ban on export of wet-blue leather had been effective since 1990 for protecting the local tannery industry.

Over the last couple of years, the local rawhide market was unusually dull, and many traders had either sold rawhide at throwaway prices or dumped them in water bodies or other open spaces due to low demand, negative export growth and some other crises.

Consequently, rawhide prices had fallen flat over the last three years. Against such a backdrop, the government has decided to allow export of rawhide and wet-blue leather on a ‘case-to-case’ basis after 32 years.

Officials from the Ministry of Commerce and the traders involved in the leather sector are now quite optimistic to see fair prices of the rawhide with a comparatively stable market after Eid-ul-Azha as the demand for rawhide is set to be revived under changed circumstances.

Meanwhile, traders have urged the government to provide financial help in order to collect a huge amount of rawhide during the Eid festival.

“We have witnessed a positive export growth in the fiscal year 2020-21 as exporters added some value to their products. Considering our domestic crises and also growing global demand, we have approved the export of wet-blue leather,” Commerce Minister Tipu Munshi told The Business Post in reply to a question.

But the leather factory owners have expressed dissatisfaction over the government’s decision to allow domestic companies to export wet-blue leather, arguing that it might create problems for the domestic leather and leather goods sector.

Each year, tanners collect 220 million square feet of leather, half of which is mostly collected during Eid-ul-Azha.

Samata Leather Executive Director Md Mizanur Rahman said around 30-35 per cent leather remained unsold or unused in their factories.

According to the Export Promotion Bureau, in FY 2020-21, earning from this sector reached $942 million where growth rate stood at 18.06 per cent.