The government has decided to allow the export of rawhide and wet blue or leather that is halfway through processing this year but imposed some conditions.
It aims to create demand in the local market and ensure proper prices for citizens who sacrifice animals and small traders during this Eid-ul-Azha.
Select businesses would be allowed to export and specific timeslots would be allotted to them to ship the rawhide, said the commerce ministry notice. They would not be allowed to export all year round.
Last year, nearly one crore pieces of rawhide worth Tk 100 crore were thrown away by citizens and small seasonal traders as they deemed the prices to be too low. A section of tanners was blamed for a trickle-down effect they had on the seasonal business.
Merchants have traditionally supplied rawhide to tanners on credit. The tanners pay a significant amount of the arrears ahead of Eid.
The merchants lend this money to regionally functioning traders, who provide the same to seasonal traders for the collection of rawhide from citizens during the Eid, which accounts for about half of Bangladesh's annual rawhide production.
However, the arrears have grown since 1990, coming to stand at some Tk 500 crore at present. And the tanners have not paid up despite making commitments several times.
This created a dearth of funds in the market alongside resentment among the merchants, leading to the low prices and discarding of rawhides.
The other factors such as hot and humid weather conditions and the ongoing pandemic will also affect rawhide business during this Eid, scheduled to be celebrated on August 1.
Moreover, old stocks of unsold leather, a fall in demand from international retailers and a yet-to-function central effluent treatment plant (CETP) in Savar Tannery Industrial Estate (STIE) will cause severe detrimental effects, said exporters, experts, traders and tanners.
Last week, the government fixed the prices for rawhides. Cattle rawhide treated with salt has been set between Tk 35 to Tk 40 per square feet when being traded within Dhaka, which is 29 per cent lower than in last year.
Outside of Dhaka, the price will range between Tk 28 and Tk 32, which is 20 per cent less year-on-year.
Similarly, it is Tk 13 to Tk 15 for the processed skins of male goats (down 27 per cent) and Tk 10 to Tk 12 for that of female goats (down 23 per cent).
"Allowing the export of rawhide and wet blue is our last weapon. We will allow rawhide export so that citizens and small traders can get the proper prices," Commerce Minister Tipu Munshi said at the price-fixing meeting.
The government had kept a ban on rawhide export in an attempt to retain it for value addition in the country's supply chain of leather and leather goods.
Since only tanners are capable of processing the product, the ban left the ordinary citizens and small traders with no choice but to give in to minimal prices offered by tanners almost every year.
This vicious cycle of unpaid arrears and minimal prices in rawhide trade has been on repeat over the past three decades.
It has come to trap many victims, including poor students of orphanages, mostly madrasas, to which ordinary people tend to donate the proceeds from the hide sales.
With arrears lingering for such a long time, some 95 per cent of the merchants have either gone bankrupt, left the businesses or simply passed away.