The merchants and traders of animal rawhide came down heavily on the tanners, and officials concerned due to a lack of funds as they were unable to purchase rawhides and skins at a fare price.
Putting blames on the tanners, rawhide merchants said they were not paid their dues although the tanners have received hefty government allocation. At the same time, officials concerned, and industry officials said the government should adopt a policy on the back of "demand and supply" taking into account all of the stakeholders.
When asked if the tanners have had any role in the recent price manipulation, Bangladesh Tannery Association (BTA) President Shahin Ahmed said: "We do not buy rawhide directly from the seasonal traders, and small retailers. Therefore, there was no way we had any hand in the steep fall in rawhide prices."
Strongly opposing the views of the tanners, Bangladesh Hide and Skin Merchants Association President Md Delwar Hossain stated that the tannery owners may have received Tk610 crore from the government.
An estimated 90% tanners did not make any payment in favour of the traders and rawhide merchants, only a meagre 7% tanners paid as little as 1% to 2% of the money. Only three tanneries have paid the full dues to the traders.
Last year around 30% rawhide were believed to have gone astray. However, it was due to erroneous rawhide processing and preservation. This year too, a little over 30% rawhide were lost, but it was due to drastic fall in price, as people who sacrificed their animals, and small traders dumped their unsold rawhide, the trade body representative said.
Delwar Hossain said tanners have now decided to collect rawhide. However, it has to be done after an extensive discussion. He went on further, saying that the tanners held rawhide merchants responsible for this recent market scam. But it has to be investigated to find out the real culprits who are responsible for the situation.
In the wake of recent controversies, the government has called a meeting among tanners, traders and the trade regulatory bodies to discuss the situation. Rawhide merchants and small traders hoped tanners would pay their dues immediately, Delwar Hossain added.
Welcoming the government decision to export rawhide, he stressed that to upend market volatility, merchants and traders urged the government to address the problems, and formulate a policy for an equitable solution.
Meanwhile, the government has taken a decision to permit rawhide exports, and launch an investigation to identify unscrupulous trade syndicates.
According to media reports, a large number of traders dumped their rawhide collection due to the steep fall in prices across the country.
The price of rawhide fell sharply this year. The cowhide was sold as low as Tk100-200 per piece in the wholesale market, resulting in huge losses to small and seasonal traders who had bought per piece cow rawhide at Tk 400-500 per piece. The goat-hides were also sold as low as Tk10, frustrating the small traders.
Meanwhile, Commerce Minister Tipu Munshi has blamed business syndicates for the low prices of raw hides of sacrificial animals during the Eid-ul-Azha.
“We had fixed the price of raw hide, ahead of Eid-ul-Azha, after consulting with leather traders, but unfortunately the price that came out in the market was extremely low, and unacceptable. Hence, we decided to export raw hides,” he said while speaking to journalists at his residence in Shalbon area of Rangpur city on Wednesday.
“Whenever we take an initiative in this regard, we find that there is resistance against it,” he added.
The minister also said that the government will take further steps to ensure that the country’s leather industry does not fall prey to others.
In a dramatic turn of events, Bangladesh Tannery Association (BTA), on Wednesday, backtracked on its earlier decision on rawhide purchase, agreeing now to start collecting rawhide on Saturday after an emergency meeting with trade officials at the Commerce Ministry.
BTA, in a press briefing held at its Dhanmondi office on the same day, announced that they would start purchasing rawhides from August 20.
Later in the day, after an emergency meeting with Commerce Ministry officials, the tannery leaders changed their decision.
"As per request from the Commerce Ministry, we have agreed to start buying rawhide on Saturday," BTA President Shahin Ahmed told Dhaka Tribune. He also said BTA has requested the government to withdraw its decision on rawhide export.
"This will affect the leather industry badly if the government does not reconsider rawhide export decision," he emphasized.
The Commerce Ministry on Tuesday issued a notice saying the government decided to allow rawhide export in a bid to ensure fair prices.
If the government allows export of rawhide, the local industry would suffer problems as the price of the raw material would go up, the BTA leader said, expressing his concern.
There is a huge number of people engaged in the leather sector who may suffer job loss. Around Tk 7,000 crore investment would come under risk if the government sticks to its decision, he observed.
Dr. Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD) said, although there has been a significant stock of rawhide from last year; demands are generally low this year.
Although the government has determined rawhide prices, but it should have been done according to the demands, supply, international market, and local inventory status, he added.
The government is required to make evidence-based policy decisions for the rawhide industry, the economist said.
According to the industry officials, 50% of the total rawhide collection is made during Eid-ul-Azha.
Half of the cattle slaughtered in Bangladesh throughout the year are sacrificed during Eid. Muslims have slaughtered around 125 million cattle this Eid, according to a government estimate.
Wholesalers buy rawhide and skin of sacrificial animals from seasonal traders, and sell these to tanners.
Industry leaders reckon that the relocation of the tanneries to Savar has affected the overall industry as most of the leather exporters, and tannery owners are suffering due to their relocation from Hazaribagh.
In the last fiscal, Bangladesh’s export earnings from leather sector suffered a significant drop of over 12% at $1.08 billion, down from $1.23 billion in 2016-17.
Ahead of Eid, the government set the prices of cowhide at Tk45-50 per square foot for the Dhaka region and Tk35-40 for other parts of the country.
The price of rawhides of goat was set at Tk18-20 which was Tk20-22 last year.
