Export permission has no effect on depressed rawhide market
Since the perishable commodity is at its trough in a long-term price cycle, tanneries have got stuck with a huge stock lot, big merchants are still looking for unpaid bills and traders are averting an anticipated risk of losses
Once rawhide procurement during Eid-ul-Adha was lucrative for the youth in neighborhoods across Bangladesh, but not anymore.
Since the perishable commodity is at its trough in a long-term price cycle, tanneries have got stuck with a huge stock lot, big merchants are still looking for unpaid bills and traders are averting an anticipated risk of losses.
This year, some agents of professional rawhide merchants have procured rawhides of sacrificial animals, of course, with an extremely cautious approach to avoid losses like what they incurred last year.
Almost no price – one-tenth of what it was five years ago – helped the religious charities receive a bigger portion of the Eid-ul-Adha rawhides this year. However, they are also not comfortable with very low-prices offered by the bulk procurers – Tk100-Tk200 for a piece of cowhide, and there is literally no price for goat hides.
Lack of activity of seasonal collectors and the conservative approach of regional merchants also led to some religious institutions opting out of their planned receipt of free rawhides on Eid Day.
However, regional wholesale traders are coming to the capital city hubs with whatever they have collected. The hide merchants are preparing for the next phase – preserving and looking for buyers, said Tipu Sultana, general secretary at Bangladesh Hide and Skin Merchants Association.
The Posta-based rawhide merchant is happy that the government has declared to allow rawhide export for the sake of price boost.
Bangladesh never exported rawhide, it was only wet blue – dried and hair plucked rawhide – until 1990.
The government would approve rawhide export consignments now on a case-to-case basis, according to a last week's declaration.
"Indian and Pakistani importers may show interest in our rawhide, but for the desired response from buyers, we need to spread information across the world that our rawhide is up for export now," said Tipu Sultan.
At the rawhide hub of Posta, Sunday appeared to be a price depressing day. Prices fell even from that last year, halved or even went down more in most cases.
Hides from even large cows are barely selling at above Tk500, and the rate is found to go down up to Tk130-150 for medium-sized cowhides.
Some traders are getting Tk10-20 for each goat hide that they have either bought at an even lower price or got for free.
The government reduced floor price for tanneries' procurement of rawhides by 20-30 percent this year. The effort to reduce the gap between reality and official rate, and the nascent official export window – nothing helped the Eid-ul-Adha market of rawhides.
Naturally, everyone is very cautious this year with the procurement rate, said Tipu Sultan.
Some regional merchants like Jamalpur district's Abu Yusuf and his boss are preserving hides with salt themselves to wait for a better price.
"We can preserve and store rawhides up to 90 days with our mere initial processing," Sultan said adding that this might help merchants get a better price.
This year, he anticipates rawhide arrival to decline by 40-50 percent amid the pandemic and floods.
On the other hand, M Shakhawat Ullah, general secretary at Bangladesh Tanners Association, predicts that the decline might be 30-35 percent at best.
He is not expecting a good response for rawhides from abroad.
"Besides, for better leather, you need cold storage within a week for salted rawhides," said the tanner's representative.
"We have the government-set rate for procurement from tanneries and that will be the pricing benchmark," he said adding, "We would begin procurement very soon."
Local leather goods manufacturers now consume around 40 percent of annual leather production in Bangladesh and the rawhide export plan, if clicks, might impact local supply of leather in the coming days, said Shakhawat Ullah.
