A lack of knowledge and experience about the market has caused most seasonal rawhide traders to count losses this Eid-ul-Azha.
However, people who sacrificed cattle – the sellers of rawhide – and the wholesalers have not complained about losses.
Sajib Ahmed, a resident of Dhaka’s Mohammadpur, along with 19 other people, bought 100 pieces of rawhide of various sizes during this Eid-ul-Azha for a little over Tk1.89 lakh – an average price of Tk1,890 per piece.
He spent another Tk5,000 or so to pay for the wage and food of the day labourers he had hired for collecting the rawhide from people who sacrificed cattle. That took the average cost price of each piece to Tk1,940.
However, when he put his lot up for sale, the best price that the wholesalers offered him was Tk1,920 per piece. This means he is now counting a Tk20 loss per piece and around Tk2,000 loss on the entire deal.
Sajib is one of hundreds of seasonal rawhide traders who invest during Eid-ul-Azha every year, hoping to make a quick profit. This year, almost all of the seasonal rawhide traders made losses.
Asked how he had fixed his purchasing price when the market price was lower, Sajib said: “I bought the rawhide at last year’s price. Last year, I saw many people make good profit at this price.”
Asked whether he knew that several tanners’ associations had officially cut down the field-level purchasing price of rawhide, Sajib said he had no idea about this.
Ali Haider, registrar of the International Business Administration and Information System (Ibais) University in Dhaka, and his acquaintance Haji Hanif, a wholesaler of rawhide, purchased around 5,000 pieces of rawhide at a cost of Tk75 lakh, that is, at Tk1,500 per piece.
As of yesterday, they had not sold their lot out of fear that they might not get even the purchasing price from the tanners – the end buyers of rawhide.
Usual vs unusual
Usually, wholesalers do not directly collect the rawhide from cattle-owners during Eid-ul-Azha.
The regular practice is that retail traders – mostly seasonal operators – buy the rawhide and sell it to wholesalers at a profit. Wholesalers add their profit and sell it to tanners.
Sometimes, tanners buy directly from the field, giving seasonal traders a good price. But this year, things were different.
Two days before Eid, at a press conference, several tanners’ associations officially announced cutting the field price of rawhide by Tk5 per square feet compared to last year.
They gave two reasons for this. First, they said the global trend of leather price was falling. Second, they claimed that they still had 40% of last year’s stock unsold.
Seasonal traders like Sajib and Ali Haider, unaware of this development, therefore overpaid.
Abu Taher, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, yesterday said about 40-50% of last year’s rawhide remained unsold due to a slowdown in the global market.
“A devaluation of the euro has cast a negative impact on Bangladesh’s leather export,” he said. About 60% of Bangladeshi leather products are exported to EU countries.