Low price: a boon for leather exporters
The low price of rawhide can be a boon for the leather sector as it will give exporters a competitive edge in the international market.
Rawhide prices dropped 20 percent this Eid following a slump in demand from the international markets, thanks to the protracted financial crisis in Europe and USA.
Leather goods and footwear exporters termed the fall in price of rawhide a good sign, saying it would give the sector a better shot at achieving its export target for the year.
Leather exports rose 17 percent in fiscal 2011-12, down from the previous year's 41 percent, according to data from the Export Promotion Bureau.
Exporters, however, bagged $765 million in fiscal 2011-2012, up from fiscal 2010-11's $651 million.
“If the prices of raw materials remain competitive, Bangladesh's exports from the sector can grow by 30 percent this fiscal year,” said Tipu Sultan, managing director of Bengal Leather Complex.
Sultan, whose company has been exporting shoes and bags for the last 10 months, said the sector can grab more orders if the current prices of leather goods remain stable in the international market.
Cowhide, which last year sold at Tk 60 per square feet in Dhaka and at Tk 40 elsewhere, was available for Tk 50 and at Tk 45 respectively this year.
Outside Dhaka, a medium-size cowhide was sold between Tk 800 and Tk 1,200, when last year it was Tk 1,200-Tk 1,500, tanners said.
The leather industry, which is reliant on local hides and skins, has now emerged as the third largest sector to contribute to exports, after garments and jute and jute goods.
“Price is a key factor to beat competitors in the international market,” said AKM Afzalur Rahman, managing director of Landmark Footwear Ltd, while adding that the Bangladesh now competes with China and India in the world leather market.
“If we can offer a better price the sector will certainly get more export orders,” said Rahman, also the vice-president of Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh.
This Eid, the tanners predicted slaughter of 45 lakh to 50 lakh cows and 17 lakh to 20 lakh goats.
Belal Hossain, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association, said the number of slaughtered cows rose by 10 percent to around 7 lakh in Dhaka alone.
Rawhide trade during Eid is said to be worth Tk 1,500 crore, according to industry people.
The tanners process more than 250 million sq ft of leather every year, half of the raw hide of which are collected during Eid-ul-Azha.