Govt to allow rawhide exports despite tanners’ objections

Although tanners have voiced opposition, the government will allow rawhide exports during the Eid-ul-Azha season with the aim of fostering demand and ensuring better prices for traders at the field level, Commerce Secretary Mahbubur Rahman said yesterday.

He added that the decision was made because, over the past few years, many rawhide traders have been getting low prices and feeling discouraged from investing in the business due to low demand and mismanagement.

A few years ago, traders even threw away rawhides as they did not receive adequate prices from seasonal traders.

The commerce secretary held a meeting at his office with the tanners, wholesalers, and senior government officials of different ministries, departments, and agencies yesterday to fix the prices of rawhide ahead of Eid-ul-Azha, expected to be celebrated on June 6.

The commerce ministry is scheduled to announce the prices on Sunday, the secretary said at the meeting.

He also said the government would distribute 30,000 tonnes of salt for free to different orphanages and madrasas to facilitate the preservation of rawhides.

After the meeting, Bangladesh Tanners Association (BTA) President Shaheen Ahmed said he opposed the government's decision to allow the export of rawhides as they are a value-added product for Bangladesh, meaning they can be processed domestically into higher-value goods rather than being exported in raw form.

The Tk 10,000 crore that has been invested in domestic tanneries will be at risk of being left without enough rawhide if the government allows exports, he added.

Currently, 140 out of 154 tanneries are operational at the Savar Tannery Industrial Estate (STIE), where the inventory of unsold hides remains a problem.

This year, more than 85 lakh cows and goats may be slaughtered across the country, nearly 15 lakh fewer than last year. This is due to the current economic situation and also because many well-off people are not in the country due to political problems, he said.

Four state-owned banks, namely Sonali, Rupali, Janata, and Agrani, agreed to provide Tk 125 crore to tanners to purchase rawhide this Eid-ul-Azha, when more than 50 percent of the rawhides are collected each year.

However, Ahmed said the tanners wanted to borrow Tk 450 crore to finance rawhide purchases this season.

After applying salt, rawhide can be preserved for many months. This allows traders to send rawhides to tanneries gradually since the tanneries do not have the capacity to tan all rawhides at once.

The government proposed increasing prices by Tk 2 to Tk 3 for each square foot of rawhide this season at the traders' level compared to prices last year. However, Ahmed opined that prices should be the same as they were last year since the economic situation is not good.

The government set the price of cowhide at Tk 55-60 per square foot in the capital and Tk 50-55 in other areas last year.

Ahmed also expressed disappointment over the country's failure to obtain certification from the much-needed Leather Working Group (LWG), a certifying body of a group of brands, retailers, product manufacturers, leather manufacturers, chemical suppliers, and technical experts that have worked together to develop an environmental stewardship protocol specifically for the leather manufacturing industry.

Because of the failure to obtain LWG certification, local tanners are forced to sell tanned leather, mainly to Chinese customers, at prices that are around 40 percent less than the global standard, he lamented.

He explained that this is because European, Japanese, and American customers do not want to buy local tanned leather at high prices due to poor compliance and a lack of LWG certification.

However, Chinese importers make hefty profits after processing Bangladeshi tanned leather in their country in accordance with LWG compliance standards.