Rawhide prices likely in 2 stages to curb price infighting

A total of 9 commercial banks, including 4 state-owned ones, have been armed with a fund of Tk573 crore ahead of Eid-ul-Azha for purchasing rawhide from traders.

Prices this year are set to be determined on two specific varieties, unsalted and salted, to avoid abysmally-low prices which have been plaguing seasonal rawhide traders during Eid for a long time now.

A meeting in this regard is set to be held either on Thursday (July 15) or next Saturday (July 17) with all relevant stakeholders, to determine the minimum prices.

The Trade and Tariff Commission of the Ministry of Commerce have already started work on fixing the prices per square feet for both the slabs.

Dhaka Tribune has obtained information that it will be proposed to fix the price of unsalted rawhide at Tk40-55 per sq ft inside the capital, while the salted ones, the better variants, will cost an additional Tk15-20 per sq ft on top of that.

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In an interview given to Dhaka Tribune on Sunday, Bangladesh Trade and Tariff Commission (BTTC) member (Trade Policy Department) Shah Md Abu Raihan Alberuni said that for the last few years, a syndicate of the leather industry has been creating anarchy centering on Eid-ul-Azha.

"This time, we want to be prepared beforehand. We are already working on a number of plans with the various departments of the Ministry of Commerce. Wet blue leather has been approved after talking to the Export Promotion Bureau (EPB). However, since it was given after such a long time, we want to see how this permission will affect the country's market, especially during the first year,’ he also said.

"To break the local syndicate and reduce the harassment of the seasonal rawhide traders, we will fix the price of rawhide at two levels. We are advising the Ministry of Commerce to declare the price of skin with and without salt separately, so that they can understand how ordinary people can sell leather without salt to the tanners. The price of leather in the world market is a bit low at the moment, so in determining the price, we are thinking of fixing the price of unsalted rawhide at Tk40-55 per sq ft in Dhaka city. On the other hand, salted rawhide will cost Tk15-20 more per sq ft," he added.

According to sources, this is all part of the government's vision to boost export momentum, which has returned to an upward trend in the last fiscal year 2020-21, after a three-year slump.

According to Bangladesh Bank sources, the government has already instructed the central bank to set up a loan fund for leather traders.

A total of 9 banks, including 4 state-owned banks, have fixed their loan amounts, which accumulated to Tk563 crore.

Also Read - Rawhide merchants now at receiving end of low prices

In addition to this, leather traders have been given the opportunity to reschedule their previous defaulted loans with a 2% down payment.

However, the leather traders said on Sunday that they were still not satisfied with this opportunity. They demanded more discounts on down payments.

On the other hand, tanners want to buy leather at the same price as last year.

Shakhawat Ullah, general secretary of Bangladesh Tanners Association, told Dhaka Tribune that for various reasons, the glorious state of the local leather industry is in the past.

However, export figures show that leather and leather products have fetched higher earnings during the Covid-19 pandemic, compared to 2019-20 fiscal year, growing at 18.05%.

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"This is good news for us. With LDG graduation in mind, the government should streamline the industry. However, with the government's permission for wet blue leather, there may be some shortfall in the local market. We know that about 50% of the leather in the footwear industry we supply comes from the rural market. So it does not seem like a good decision," Shakhawat also said.

"The Trade and Tariff Commission usually fixes the price of salted rawhide before Eid-ul-Azha. We will place our price demands during the upcoming meeting," said the BTA general secretary.

"We always owe something to the hide and skin merchants. This is a recurring process while doing business. But we do not have any conflict with them. This year we have set a target of collecting at least 8 million pieces of rawhide”, he added.