They further alleged that the tanners then exploited the lowered price by buying hide directly from local traders, instead of through the hide merchants as per the regular practice
Seasonal traders and raw hide merchants have claimed that tanners lowered the price of raw hides from sacrificial cattle by neglecting to pay the hide merchants their arrears from the previous year.
The hide merchants further alleged that the tanners then exploited the lowered price by buying hide directly from local traders, instead of through the hide merchants as per the regular practice.
On the other hand, tanners have claimed that they were unable to buy significant amounts of hide this year, as they are suffering from a fund crisis after the relocation of tannery industries from Hazaribagh to Savar.
During a visit to several areas of Dhaka, this correspondent found that the prices of hide had seen a drastic fall compared to last year. Cow hide of a standard size was selling at Tk500-800, whereas it sold at Tk1,000-1,900 in 2017.
Tanners normally purchase raw hide from raw hide merchants, and pay arrears for the previous year before Eid-ul-Azha. However, hide merchants said the tanners did not clear the full arrears of 2017 this year.
Bangladesh Hide and Skin Merchants Association President Hazi Md Delwar Hossain told the Dhaka Tribune: “This year, we did not get enough of the money that the tannersowed us before Eid. Only 20-30% of the payments were made.”
The tanners currently owe the hide merchants about Tk350 crore.
As the hide merchants did not receive sufficient money from the tanners, they were unable to purchase the usual quantity of raw hide from seasonal traders, reducing the price of the hide. The tanners thentook advantage of the situation by going to seasonal traders and buying the raw hide directly at the lowered prices, Delwar claimed.
“They did not pay our dues, but bought hide directly from the seasonal market. Where did this money come from?” he questioned.
Bogra Raw Hide Merchants Association Senior Vice President Shahidul Islam said: “Last year, the tanners bought raw hide at high prices, and much of this hide went unsold. The tanners would have incurred significant losses if they failed to buy at lower prices this year.”
“This is why the tanners intentionally reduced the price of raw hide,” he alleged.
Meanwhile, seasonal traders said they were forced to sell at lower prices due to insufficient demand from raw hide merchants.
“Last year at Eid-ul-Azha, I sold cattle hide at Tk2,000, as opposed to Tk900 this year,” Mohammad Ali Ahsan, a resident at Mirpur, told the Dhaka Tribune
He said some hide merchants even came in the evening to pressure sales at lower prices.
“I think the government should monitor the market to ensure that prices are reasonable and we don’t incur losses,” he added.
-Tanners to buy at government set rate-
In a press conference at the Bangladesh Tanners Association (BTA) office in Dhaka yesterday, the BTA has said that it will begin purchasing raw hide at the rate set by the government soon.
Addressing the press conference, BTA president Md Shaheen Ahamed said the government has set the prices of salted raw hidefrom sacrificed cows at Tk45-50 per square foot in Dhaka, and at Tk35-40 for other parts of the country.
Last year, the price per square foot of salted raw hide was set at Tk50-55 for the Dhaka region, and Tk40-45 outside of Dhaka.
The BTA president urged seasonal traders and hide merchants to not be in a hurry to sell hides and to preserve them properly, as the BTA would begin collection in the next 7-10 days.
“The sector is in a severe fund crunch, as tannery owners had to spend a huge amount of money to relocate from Hazaribagh to Savar. They did not get financial support from the government,” he said.
Some of the owners are yet to gain registration for the land in Savar, which has hampered their ability to secure loans from banks, he added.
Of 113 tanneries which are in production, state-owned banks have provided funds for only 42, Shaheen said, adding that reduced export earnings from the leather sector also contributed to the funding problems.
The BTA leader also said the association could not be held responsible if “a social or political group,by forming a syndicate,buys hide at lower prices.”
Furthermore, Shaheen urged the government to increase monitoring at border areas, to ensure that raw hide was not smuggled to neighbouring countries.
However, the BTA president said they were optimistic of meeting the collection target of 10 million hides from sacrificial animals this year.
He added that the reduced prices of hide this year was an isolated incident, and most traders had bought hide at the rate set by the government.
In the last fiscal year, Bangladesh’s export earnings from leather and leather goods suffered a drop of over 12% - $1.08 billion, as comparedto $1.23 billion in FY17.
According to Department of Livestock, a total of 10.4 million animals were slaughtered last year, and 11.5 million are expected to have been slaughtered this year.