Recommendations of a taskforce on leather industry including keeping vigil to check the rumour about rawhide prices gather dust, leaving space for another ‘rawhide debacle’ during next Eid-ul-Adha.
The taskforce, formed in the wake last year’s rawhide debacle, has also recommended the home ministry to check border smuggling of cattle and rawhide before and after the Eid-ul Adha festival.
Besides, it has further recommended the Financial Institutions Divisions (FID) to take measures to reschedule loan of rawhide businessmen.
The taskforce on leather industry on June 22 made the eight recommendations in second meeting at industry ministry with Industry minister Nurul Majid Mahmud Humayun in the chair.
Stakeholders said the taskforce recommendations have not yet been executed due to coronavirus fallout specially complexity of bank loan.
As a result of the coronavirus pandemic, exports to most countries, including China, the United States, the United Kingdom and Hong Kong, have stopped. As a result, leather worth Tk 3,000 to Tk 3,200 crore is lying in various tanneries. Of these, wet blue worth Tk 2,500 crore and crust worth Tk 600 to Tk 700 crore.
Eid-ul Adha, which is knocking at the next door, paves the way for the tanners to collect 60% of their yearly demand. All parties are concerned about how the leather will be collected in the current difficult situation.
According to taskforce, commerce ministry will prepare a TVC for this purpose and air it on BTV featuring rawhide collection and processing by keeping social distancing amid coronavirus pandemic.
Taskforce also recommended the Financial Institutions Division under Finance Ministry will also direct the Bangladesh Bank on arranging new loans for the seasonal rawhide traders. But in response, the central bank asked the division to arrange loan for the rawhide traders from budget.
Financial Institutions Division on July 8 sent a letter to assess the current state of the leather industry and to give cash credit of Tk 600 to Tk 700 crore at 3 per cent interest so that merchants can buy rawhide of sacrificial animals.
A managing director of a state-owned bank not to be mentioned said the banks are implementing government incentives package so it is not possible look into the matter to reschedule of loan of rawhide and tannery businessmen.
Over all business situation is not good at all so bankers are not interested to lend money, top official said adding that in this situation people are not interested to buy cattle in Eid festival.
Chairman of Bangladesh Tanners Association Shaheen Ahmed said that the tannery industry could not do any business from 2016 to 2020. At the moment, leather worth Tk 3200 is unsold. On the other hand, the interest on the bank loan in favour of the tannery has been Tk 250 to Tk 300 crore.
It is known that America is a big market for Chinese exports. Product sales have declined there. Again, the big leather market of Bangladesh is China. Leather exports to China have also declined for the same reason. In such a situation, Eid-ul Adha is approaching. However, the owners of the tanneries are not showing much interest in this.
Officials at Bangladesh's Department of Animal Resources say there were 1.16 million animals ready to sacrifice in the country last year. Of these, 45 lakh are cows and 61 lakh are goats and sheep.
