Home ›› 06 Jul 2020 ›› World Biz
In the wake of huge spoilage of rawhide during the last Eid-ul-Azha, Bangladesh Trade and Tariff Commission has recommended exporting rawhides after almost three decades, making marginal people and seasonal traders happy but the industry insiders unhappy.
The commission’s proposal made the entrepreneurs and export-oriented traders in the leather sector gloomy, saying that if the opportunity to export rawhides is given, the traders of this sector will face huge losses.
According to the tariff commission, the commission has made these recommendations in the light of last year's syndication and subsequent rotting of rawhide. Last year, a large part of the country's animal hides rotted because traders couldn’t manage money which was unpaid by tanners of Dhaka.
Tariff commission also suggests to set minimum prices of the animal hides to protect them from spoilage.
Owners of tanneries did not release enough money in the market to buy rawhides last year and the tanners shifted the blame to unavailability of bank loans for the last year’s rawhide disaster. As the demand was low, the price also went down. Many people dumped their animal hides in the ground. In many places, salt was sold at a higher price exacerbating rotting of the valuable raw materials.
The tariff commission still sees no hope for the situation to improve as no one was implicated or punished for syndication. In such a situation, the tariff commission has recommended reducing the price of leather. Last year, the fixed price for cow hide was Tk 45 to Tk 50 per square foot. This time the commission has proposed to fix it at Tk 30 to Tk 40. Besides, the price of goat skin has been proposed at Tk 15 to Tk 25 instead of Tk 18 to Tk 20 per square foot.
The commission's report further said that the use of synthetic fabrics and synthetic leather has increased in the products that used to be made of leather, tamping down the prices of leather worldwide. The price of salted rawhide in the international market is now 50 cents to 1.5 US dollars per square foot. The price of salted rawhides per square foot stands at Tk 43 to Tk 129 (1 dollar= Tk 86).
Abu Raihan Alberuni, a member of the commission (trade policy), sent the report of the tariff commission to the Ministry of Commerce. He said, “Export opportunities can be given by fixing the minimum price. This will benefit the people and farmers of the country. The demand for leather will be created.”
Bangladesh Tanners Association (BTA) President Shaheen Ahmed told The Business Post that exports of pre-processed wet blue leather from Bangladesh have stopped since 1990. At that time this decision was taken with the aim of adding value to the country. After that the traders brought modern equipment and started the second stage of leather processing ‘crust’ and the third stage ‘finished leather’.
He added that Bangladesh had benefited from the decision to stop the export of rawhides in 1990. Exports of processed leather and leather products gradually increased. There is a lot of investment in this sector. In the last decade, there have been many export-oriented and domestic market oriented leather products factories in the country. In this situation, if the decision is taken to export raw leather, the traders of the country will suffer.
Mohiuddin Ahmed, chairman of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA) said, “It is not possible to follow the standards required for leather exports, including phytosanitary certificates. Because, cows are not slaughtered in modern slaughterhouses in the country. And if you want to send raw leather to India, there was no need to build a leather industry city in the country. We should not think of export without saving this sector.”
Delwar Hossain, president of the Bangladesh Skin and Hide Merchants Association, told The Business Post that last year, many seasonal hide traders could not buy rawhide due to lack of cash as the government could not ensure timely bank loans to traders. As a result, a lot of rawhides have been damaged.
This year, bleak future hangs on the business due to coronavirus. In this situation, if the decision is taken to export leather without giving opportunity to the local entrepreneurs and traders, it will throw the sector into a deeper crisis.
According to the Department of Livestock, about 1 crore 10 lakh animals are slaughtered in the country on Eid-ul-Azha. Of these, 40 to 45 lakh cows and buffaloes. Cattle slaughtered on Eid-ul-Azha are in good health. So the quality of the skin is very good. So the tanneries collect 50 percent of the total leather on Eid-ul-Azha. Every year before Eid-ul-Azha, the Ministry of Commerce and traders meet and announce prices for rawhide.
