Why have rawhide prices plummeted suddenly?
We know from previous years that about 1 crore animals would be sacrificed during Eid-ul-Azha. So, the collapse of prices came as a big surprise, as the market had anticipated, or should have anticipated, this huge supply of rawhides. The supply chain of rawhides starts with seasonal traders purchasing individual hides. These are then bought by merchants (wholesalers) who in turn supply to the tanners.
According to tanners, they paid merchants between Tk 30 and Tk 35 crore. Tanners pay merchants in phases and we have been told by a representative of the Bangladesh Hide and Skin Merchants' Association that it is owed about Tk 400 crore in arrears as of August 14. This claim has been refuted by the tanners' association which has stated that a total of Tk 150 crore has been paid to merchants. Even if we were to take the tanners' claim to be true, that still leaves a few hundred crores in unpaid dues.
Another reason for tanners' lack of interest in purchasing rawhides this year comes from the fact that the tanneries already had some stock of hide in their inventories. The sudden lack of interest in purchasing hides left seasonal traders at the short end of the stick. It is hardly surprising that Tk 100 crore worth of rawhides has been dumped on the roads because there is no demand for these skins at the fixed rates.
The government should have anticipated all these factors and taken measures prior to Eid. The commerce minister's response about syndicates is nothing more than a vain attempt to avoid responsibility for this debacle. Our question is: how could authorities fix prices at a level which was not followed by any party? The concerned ministry should have sat down with all the stakeholders to ensure smooth operation of the entire supply chain. We blame both tanners and merchants for the sudden collapse of demand and this is where authorities should focus on in their investigation and bring the guilty parties to face the full force of the law. We simply cannot afford a repetition of this situation next year because there is too much at stake.
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