Seasonal traders of rawhide have been left disappointed by this year’s sales as the price for untanned leather has remained low for two consecutive years now.
During Eid-ul-Azha, a three-day Islamic celebration that began on 31 July, nearly one crore heads of cattle were sacrificed by the general public.
Most of the leftover animal hides are collected by various traders, who then prepare the skins for sale to tanners or appointed dealers.
However, for the past two weeks, traders at major rawhide markets in Dhaka, Palashbari, Tangail, Mymensingh, Jessore and Chattogram have all reported receiving low prices for the product.
Ful Kumar, a seasonal rawhide trader at the Shambhuganj rawhide market in Mymensingh, had sourced 1,000 rawhides at Tk 500 to Tk 550 per piece from the field level.
On average, he had to spend Tk 150 on cleaning and salting each piece but still, he could not sell his rawhides for more than Tk 800 to Tk 850 per item.
He made Tk 50 profit from each piece of rawhide.
“My revenue from rawhide sales has been so low over the last two years. Previously, the business was quite profitable,” said Kumar, who has been in the business for the past 25 years.
Echoing the sentiment, Shahid Mia, a fellow seasonal trader at the same market, said that he bought about 2,316 rawhides for Tk 400 and Tk 450 per piece during Eid-ul-Azha but could not register a decent turnover as tanners offered low prices.
He managed to get rid of his stock of untanned leather at Tk 600 to Tk 650 for each unit.
A similar scenario has played out for rawhide traders across the country, some of whom opted to dump their stocks rather than sell for cheap.
However, compared with last year, a smaller amount of rawhide was discarded due to the government’s monitoring of the rawhide market and ongoing coronavirus pandemic.
Besides, the market for sacrificial animals saw a 30 per cent decline in sales as the general public was less enthusiastic about commemorating the holiday amid the coronavirus fallout while nearly 19 districts across the country had been flooded by torrential rain at the time as well.
Seasonal traders have already sold about 70 per cent of their overall stock to tanners in the last two weeks, said Aftab Khan, chairman of the Bangladesh Hide and Skin Merchant Association, the country’s main platform for buying and selling rawhides.
Goat skins were not even counted in the official tally because of their extremely low value and demand. As such, the hides were either thrown away, given for free or sold between Tk 5 and Tk 10 per piece after Eid-ul-Azha.
The total value for rawhide sales was estimated to be Tk 500 crore this year but just a few years back, the market value for animal skins was more than Tk 1,200 crore even though a smaller number of cattle were sacrificed back then.
Usually, rawhide prices in Dhaka are comparatively higher than that of those produced in rural areas owing to their superior size and quality, Khan said, adding that he blames the tanners for the poor inflow of funding.
Tanners are purchasing salted rawhides at prices fixed by the government at Tk 1,000 to Tk 1,200 per piece in Dhaka and Tk 700 to Tk 800 per piece from anywhere else, said Shaheen Ahmed, president of the Bangladesh Tanners Association.
However, although the government fixed the price of salted rawhide, it did not do the same for the unsalted version and this is one of the main reasons behind the low prices offered by tanners during the Eid days.
Tanners do not usually purchase unsalted rawhides as the product gets spoilt in a short span of time, he said, adding that the root-level rawhide producers are deprived of proper prices in the process.
Since the government fixed the price of salted rawhides but not the unsalted ones, it causes confusion among producers and traders, said Abu Eusuf, professor of economics at the Department of Development Studies of the University of Dhaka.
Producers end up demanding high prices from traders, who are unable to pay such amounts for unsalted rawhide.
On the other hand, tanners do not even buy unsalted rawhides, he said, adding that this confusion must be removed to ensure better business practices in the sector.
Meanwhile, the Bangladesh Trade and Tariff Commission, said that organised syndication for price-fixing has caused the value of rawhide to hover at abnormally low rates at domestic markets for the past two years.
The government fixed a Tk 35 to Tk 40 ceiling on the price per square foot of salted cow or buffalo hides inside Dhaka, which is 29 per cent lower than last year’s prices, said Commerce Minister Tipu Munshi.
Outside Dhaka though, salted hides can be purchased for between Tk 28 and Tk 32 per square foot, which is 20 per cent lower than its value in the previous year.
The price for male goat hides was set between Tk 13 and Tk 15 per square foot, a 27 per cent decline from what it was sold at last year, while the prices for female goatskin was fixed at between Tk 10 and Tk 12 per square foot, a 23 per cent slump in prices year-on-year.
To curb the damage done to the sector, the government had allowed the export of rawhide and wet blue (half-processed leather) items in a bid to ensure that producers and small traders at the field level get proper prices during Eid.
However, the initiative has seen few results so far.
Commerce Secretary Md. Jafar Uddin could not be reached for a comment in this regard.