Unless the prices of rawhide are fixed judiciously, a large-scale smuggling of sacrificial animals’ skins to neighbouring India is likely, said official sources.
An intelligence agency report finds the high risk of illegal transborder trade of rawhide during Eid-ul-Azha this year as the tanners want the prices remain unfixed.
In these circumstances, the Ministry of Commerce is expected to opt for announcing the prices like the previous years.
The ministry may suggest Tk85-90 for a square foot of cowhide and Tk50-55 for goat hide.
According to the agency report, the Indian traders have provided loans to the Bangladeshi traders to purchase rawhide at cheap rates as much as possible during Eid-ul-Azha.
Traders in the bordering districts of Jessore, Thakurgaon Panchagrh and Lalmonirhat have allegedly received advance money from the Indian counterparts.
A commerce ministry working paper in this regard will also be placed at an inter-ministerial meeting today.
Commerce Minister Tofail Ahmed will preside over the meeting. Commerce Secretary Hedayetullah Al Mamoon, among others, will also attend the meeting.
“Though the tanners do not want, we will decide prices of rawhide before Eid-ul-Azha to stop the possible smuggling,” said an official at the commerce ministry.
As per working paper, the country’s tanners have predicted that the prices of rawhide and skin will be lower this year compared to the last year’s as there is decline in international prices by 20 US cents per square foot.
But the commerce ministry has not accepted the tanners’ prediction since the decline is that significant.
Bangladesh’s rawhide and leather goods export have remained growing in the past couple of years. In the FY2013-14, the growth was 32.13%.
“Measures will definetly be taken to prevent smuggling of rawhide during Eid-ul-Azha,” Commerce Secretary told the Dhaka Tribune.
But the tanners want the prices be set in the free market as the global prices “keep falling.”
“As the prices are falling in international market, the prices should not be fixed in the local market. Let it open to the market trends,” said Md Shaheen Ahmed, chairman of Bangladesh Tanners Association.
He said they will demand the commerce ministry at the meeting today not to fix the prices due to the global market situation.
According to the Directorate of Livestock, a total of 65.39 lakh animals, mostly cows, were slaughtered on Eid-ul-Azha last year.
A total of 220 tannery businesses control the rawhide market in Bangladesh while 22 crore square feet rawhide and skins are traded annually.
Out of 22 crore, 65% are cowhide and 32% goat hide and skins of other animals, according to Business Promotion Council.
Tanners to get Tk600cr loan for rawhide purchase
Four state-owned banks have decided to give Tk590 crore credit to the tanners for purchasing rawhides of the sacrificial animals during the upcoming Eid-ul-Azha.
The credit amount has been raised by Tk129 crore this year, comparing to the previous year (2013). The amount of last year was Tk461 crore.
As the country is doing well in exporting leather and leather goods, the loan for buying rawhide has been increased this year, said the officials of the state-owned bank.
Besides, 80% of the country’s rawhides are collected during Eid-ul-Azha festival, an official pointed out.
A total of 23 enterprises will be able to avail the loans while Janata will disburse the highest amount of loan to the rawhide and skin businessmen.
Out of Tk590 crore, Janata bank will give Tk250 crore while Sonali will disburse Tk160 crore, Agrani Bank Tk120 crore and Rupali Bank Tk60 crore.
“We will give the credit only to those tannery businessmen, who duly pay back 100% loans and we have increased the loan amount up to Tk120 crore, which is Tk6 crore higher than the previous year,” said Managing Director of Agrani Bank Syed Abdul Hamid.
Amount of the total loan defaulters in tannery business stood at Tk900 crore as most of the defaults occurred during 1990’s, according to the Bangladesh Bank data,
Meanwhile, the country’s tanners have demanded Tk400 crore loans from the state-owned four commercial banks Sonali, Agrani, Janata and Rupali to procure rawhide of the sacrificial animals during the upcoming Eid to be celebrated on October 6.
The tanners are set to take a good amount of loans from the country’s state-owned commercial banks ahead of Eid-ul-Azha to meet their financial demand for procuring the rawhide.
Shahin Ahmed, president of Bangladesh Tanners Association (BTA), a major platform of the local tanners, said the tanners had submitted a proposal to the state-owned four commercial banks for providing Tk400 crore credit as “Qurbani Advance” for this year.
The tanners received Tk365 crore credits from the public commercial banks in the name of “Qurbani Advance” in last year, he informed.
A large amount of money is needed for the businessmen to procure rawhide and skin during the Eid-ul-Azha every year as more than 50% of the annual demand of raw leather has been procured during this only festival, he claimed.
The tanners of the country are now facing shortage of working capital as a good number of finished leather remained stockpile following a short fall of the export order, the BTA president noted. The tanners are also investing huge amount of money for relocating their tanneries from Hazaribagh to Savar Leather Industrial Estate, said Ahmed.
