Hides sold at low prices

Poor flow of funds, non-operation of tanneries, and high salt prices resulted in people having to sell the hides of their sacrificial animals at low prices this Eid.

Prices of rawhides dropped more than 30 percent compared to that of the previous Eid-ul-Azha, said people who sacrificed animals.

A medium sized rawhide of a cow was sold between Tk 600 and Tk 800 this Eid but the same was sold between Tk 1,200 and Tk 1,300 during last year's Eid, they said.

Rawhide traders at Posta, country's largest rawhide market, said this year they bought 20 percent less rawhides than last year due mostly to financial constraints and floods.

About five percent of the rawhide had turned bad for not being treated with chemicals and salt timely, said Mohammad Ali, a trader at Posta.

Seventy percent of the rawhides of sacrificial animals of Dhaka are traded in Posta, the remaining go to Hazaribagh, he said.

Although, the tanners have already moved their machinery to Savar leather estate, rawhides were still being taken to Hazaribagh so that salt could be applied to them, Ali said.

Ali also blamed foreign buyers for lower prices of rawhides as they do not offer higher prices for quality leather goods for which the prices of rawhides dropped a few years ago.

“We could sell a large rawhide to tanners for Tk 3,500 last year but this year they will pay Tk 2,200 a piece,” he said.

He said, “Many traders have lost interest in rawhide trade due to the declining trend of rawhide prices.”

Traders said a 75kg bag of salt was between Tk 800 and Tk 900 last year but this year it was between Tk 1,400 and Tk 1,500 and many small traders failed to use the salt timely, leading to the hides going bad.

Shaheen Ahamed, chairman of Bangladesh Tanners Association (BTA), said the tanners would begin buying the salt-applied hides from warehouses a week later.

“We have already suggested that the seasonal traders and warehouse owners apply adequate salt on the hides so that the quality does not deteriorate,” Ahamed said.

Ahamed said this year at least 20 percent fewer animals were sacrificed due to the floods.

This year is different from other years as not all tanners could go into production at the newly constructed leather estate in Savar, he said, adding that about half the tanneries were in production.

Many tanners could not manage adequate funds from banks mortgaging their land, which were yet to be registered to them, he said.

He urged the government to continue its vigil at the borders so that rawhides could not be smuggled out to India, where hide prices are higher.

“The price declined so low this year that I had to sell a piece of goat rawhide for Tk 20 when the government rate is Tk 80,” said Loban Ali Mondol, a resident of Natore.

The prices of cow hides were also low. Cowhides were sold between Tk 500 and Tk 700 a piece, which were sold between Tk 1,000 and Tk 1,200 a piece in Natore, the country's second largest rawhide trading market.

The number of seasonal traders was low in the northern region because of the floods, sources said. Rawhide warehouse owners in Natore were also not paying the seasonal traders much for the hides.

“We do not want to take risks as there is a possibility of losing capital if we purchase rawhides from seasonal local traders,” said Samad Mia, a trader in Natore.

He said the sale of rawhides would be on Friday when seasonal traders of all districts in the north bring in their hides.

Rawhide traders in Sylhet also alleged that they had not been getting support from tannery owners in Dhaka for the last three years, which was discouraging them.

Mohammad Ibrahim, owner of M/S Ibrahim Chamra Dokan in Sylhet, said, “Since 2014, we barely get 30 to 40 percent of our money from them as they told us that they had to move their factories, which was expensive.”

He said many rawhide traders collected a very small number of hides this time to avoid losses.

The industries ministry recently claimed that 67 of the 155 tanneries started fully-fledged operation at the newly constructed leather estate in Savar, but the tanners said only 20 of them were up and running.

The majority of the tanneries could not start operations as they had no gas connection, or had incomplete factory structures.

This Eid-ul-Azha, the price of per square foot of cow rawhide was fixed at Tk 50-55 in Dhaka and Tk 40-45 outside of the capital. For he-goat hides the rate was Tk 40-45 and for she-goats Tk 15-17 across the country.

Leather and leather goods are the second highest export earning sector after apparel. It raked in $1.23 billion last fiscal year, up 6.29 percent year-on-year, according to data from the Export Promotion Bureau.

This year, 44.57 lakh cows and buffaloes and 71 lakh goats and sheep were expected to be sacrificed in the country, which is lower than the previous year, according to data from the commerce ministry.