Small rawhide traders in trouble
Rawhide traders running small-scale operations are in trouble as they cannot sell their salt-cured hides at prices of their expectations due to influential traders seeking to slow the pace of purchases at this moment.
"Tannery owners and big merchants of rawhides want to get products on credit and have no intention of making purchases at government-fixed rates," said Robiul Alam, president of the Dhaka District Hide Merchants Association.
Alam alleged that the tannery businesses diversified to other trades, for which there was no competition.
The growth of business in the leather sector has been very slow as the businesses have no intention for the betterment and development of the sector, he alleged.
According to him, tannery owners do not need to purchase rawhides from the small traders and from the field level.
"The big merchants who purchase rawhides from small traders intend to secure low prices. For this reason the small businesspeople do not get better prices despite the work small traders put in as preliminary preservation measures," he noted.
He also said banks do not provide loan to the small traders while big merchant avail loans as they have access to finance.
Accusing the government, he said there was monitoring on rawhide businesses and without holding any discussion with rawhide traders, the commerce ministry decided to allow export of wet blue leather.
He suggested allowing foreign investors into the leather sector to ensure better prices of rawhides and increase competitiveness.
According to information from different parts of the country, big merchants want to make purchases at Tk 500 to Tk 600 per piece of rawhide and expect to sell those at Tk 800 to Tk 1,000.
But the price of rawhides of goats is not more than Tk 150 per piece.
However, Babul Hossain, vice president of Amin Bazar Wholesale Skin Merchant Association, said they have purchased rawhides from seasonal and small traders at Tk 300 to Tk 900 per piece depending on the quality and size.
He said they also purchased salt-cured hides from different parts of the country at higher prices compared to those without salt.
According to him, at least Tk 150 to Tk 225 has to be invested per piece for the curing, including salt application and labour.
"We want to do business getting at least Tk 200 against per piece of hide. We are expecting to sell on an average Tk 1,050 per piece," he noted.
He said they made purchases at Tk 600 per hide that has not been cured with salt on an average from the small and seasonal traders.
He also said the rate of the cured raw hide was Tk 100 to Tk 200 higher than that last year.
Md Aftab Uddin, president of the Bangladesh Hide and Skin Merchants Association, said they were purchasing salt-cured rawhides at the government-fixed rate.
However, he said, there were some cases when the rate was not being abided by.
He also ruled out allegations of a syndicate of big merchants not paying good prices for rawhides to small traders.
"If the small traders were not making a profit, they would not be engaging in this business. The business would not run," he said.
The government earlier fixed prices of salt-cured rawhides of cows at Tk 40-Tk 45 per square foot in Dhaka and Tk 33-Tk 37 outside Dhaka to ensure fair prices and avoid a recurrence of last year's situation when many threw away rawhides failing to recover even their costs.
Eid-ul-Azha, one of the two largest religious festivals for Muslims, accounts for more than half of the country's annual rawhide collection.
This year though, amid a slew of restrictions aimed at curbing the spread of Covid-19, the number of cattle sacrificed was considerably lower as most people avoided big expenses during this time of crisis.
A total of 90.9 lakh cattle were sacrificed this year, down by about 3.8 per cent from that in 2020, according to data from the Department of Livestock Services (DLS).
This year the government permitted five local tanneries to export wet blue leather for one year as a measure to create demand for rawhide in the domestic markets during the peak season of Eid-ul-Azha.
The commerce ministry gave the conditional permission after the authorities of the tanneries submitted applications to the ministry in this regard.
Wet blue leather refers to unfinished hides that have been dehaired and chrome tanned as a means to preserve the leather.
Mohiuddin Ahmed Mahin, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, said prices of properly salted rawhides begin at Tk 5 to Tk 7 per square foot while those not properly done are even lower.
He said rawhide business was quite technical and if traders fail to apply salt within four hours, the hides end up not being preserved properly and not generating expected prices.
Regarding the allegation of low prices, he said definitely the traders failed to apply salt timely for which they were not getting good prices.
He said the tannery owners have started to purchase salt-cured hides and they would try to purchase quality hides to ensure quality through tanning.
According to traders, the total final price of rawhides would reach Tk 370 crore and total amount in transactions from the field level to tannery owners would reach around Tk 600 crore.