Falling demand, syndication behind decrease in rawhide prices

Experts have blamed the lack of policy, syndication by tanners, their ‘cash crunch’ and a fall in the demand for leather products for the unprecedented fall in the prices of rawhide of sacrificed animals this year.

The drastic fall in rawhide prices forced seasonal traders in different districts, including Dhaka, Chattogram, Narayanganj, Narsingdi, Sylhet, Rajshahi and Khulna, to throw away thousands of pieces of rawhide of cows, goats and buffaloes during Eid-ul-Azha.

Many also buried the rawhide under the ground failing to get the expected prices while others sold it at throwaway prices.

Talking to UNB, a number of seasonal traders said cowhide was sold between Tk 100 and Tk 200 a piece this year whereas the usual price is around Tk 2,000.

Rezaul Bepari, seasonal rawhide trader from Shariatpur, said he bought 200 pieces of rawhide this year at Tk 150-Tk 250 apiece but wholesalers offered him less than the purchasing prices for those. “I have been doing the business for many years. Once there’s a huge demand for rawhide and it was a profitable business. But the price is now very low. Besides, there’s no value of goat hide this year,” he said.

President of Consumers Association of Bangladesh (CAB) Ghulam Rahman said a syndicate by unscrupulous businessmen might be behind the drastic slump in rawhide prices. “Tannery owners claimed in one hand that they couldn’t yet sell their last year’s leather, but they’re urging the government not to allow rawhide export on the other hand.”

Actually, they are trying to make extra profits through this but it cannot be allowed, he said.

Ghulam Rahman said the prices of finished leather products are high here and so there is no logical reason behind the fall in rawhide prices. “The matter should be investigated thoroughly and punishment must be meted out to the dishonest businessmen.”

Md Shaheen Ahmed, Chairman of Bangladesh Tanners Association (BTA), claimed that tannery owners are facing a cash crunch as they had to make huge investments for relocating tanneries to Savar from Hazaribagh.

He also said around 30-40 percent tanneries are yet to start production after their relocation to Savar from Hazaribagh in 2017.

Abdur Rahman, a sales executive of GM Leather Collection of the city, said the demand for natural rawhide has seen a decline as the markets here are flooded with artificial leather goods.

“Prices of footwear or other leather products depend on quality. A pair of shoes made from genuine leather is sold at Tk 4,000-Tk 10,000 but shoes made from artificial leather is sold at Tk 1500-Tk 3500,” he added.

Rahman also said at least five pairs of shoes can be produced from a cowhide. “But there’s a lengthy process to make a pair of shoes and it shoots up the production cost.”

Dr Mohammad Mahfuz Kabir, research director of Bangladesh Institute of International and Strategic Studies (BIISS), said rawhide prices went down unprecedentedly this year due to the absence of timely and proper decision by the government.

“The rawhide prices would not have seen the drastic fall had the government taken the export decision earlier. There should a policy reform that rawhide can be exported during Eid season only,” he said.

Meanwhile, madrasas that received thousands of pieces of rawhide in donation during Eid-ul-Azha failed to sell those due to reluctance from merchants.

Mufti Monirul Islam, a teacher of Qawmi madrasa in Keraniganj, said they used to earn Tk several lakh from the sales of rawhide every year in the past which could meet almost 70 percent of the madrasa’s expenses. “But we could manage little money from rawhide sales this time following cheap rate. We’re worried about bearing the cost of orphans this year,” he said.

According to the Export Promotion Bureau (EPB), Bangladesh earned $1.01 billion by exporting leather, leather goods and leather footwear in the fiscal year of 2018-19. The export earnings from the leather sector were $1.08 billion in the FY2017-18.