Traders in Lalbagh’s Posta, the biggest rawhide wholesale market in Bangladesh, have been buying rawhide from seasonal traders and middlemen at an elevated price as the supply has fallen more than expected.
A piece of cowhide priced at Tk 500 to Tk 650 on Sunday, Eid day, shot up to Tk 1,200 early on Monday, according to bdnews24.com.
The rawhide market saw a slump in business last year due to the spread of the coronavirus pandemic. Wholesalers bought cowhide from seasonal traders at a maximum price of Tk 600.
As the rawhide price soared, sellers from madrasas, orphanages and middlemen beamed with happiness at Posta, Science Laboratory, Azimpur, Kalabagan, Kathalbagan, Moghbazar and Jatrabari on the evening of Eid day.
Following the Eid prayers on Sunday, people began to slaughter sacrificial animals on the Dhaka streets, alleys and pavements. More than 1.2 million animals were to be slaughtered, according to officials at the two Dhaka city corporations.
Usually, staff and representatives from the local mosques, madrasas and orphanages collect the rawhide as a donation from households in Dhaka. Some seasonal traders also buy rawhide on Eid day and then sell them to wholesalers.
The wholesalers in Posta preserve the rawhide with salt and then sell them to the tanneries. Every year, the commerce ministry fixes the price at which the tanneries purchase rawhide. Some tanneries, however, buy rawhide directly from the middlemen.
The government has fixed the price of salted cowhide at Tk 47 to Tk 52 per square foot for the tanneries in Dhaka. The price is Tk 40 to Tk 44 for the tanneries outside Dhaka. In both cases, the price increased by Tk 7 over last year. Salted goatskin was sold to the tanneries at a rate of Tk 18 to Tk 20 per square foot across the country, a Tk 3 increase from last year.
However, middlemen or seasonal traders do not set the price per square foot when they buy the rawhide from people who sacrifice animals. They make a deal depending on the size of the hide, and then sell them to the wholesalers at a mark-up. The wholesalers then sell the rawhide to the tanneries at the government-prescribed rate or more.
During Eid-ul-Azha, tanneries in Bangladesh buy more than half of the rawhide they buy annually. The coronavirus pandemic and the low rate of rawhide in the international market brought a lull in the business in the last two years.
Amid the volatile international market caused by the Ukraine war and inflation in the local market seasonal traders, madrasas and orphanages began collecting this year's rawhide.
The majority of the people in Dhaka donated rawhide to different madrasas and orphanages. The wholesalers and tannery representatives bought the rawhide from them in the evening.
The cowhide price ranged from Tk 300 to Tk 650 based on its size when the wholesalers bought it from the madrasa students and teachers. The largest size, however, was sold at Tk 800.
A group of students from Darul Ulum Madrasa at Mirpur 14, led by their teacher Mohammad Waliullah, rented a truck and came to the Science Laboratory intersection hoping to sell the rawhide at a better price.
“We got one buyer from the tanneries. The average price is Tk 800 per piece and we have 95 pieces with us. But as we were bargaining, a magistrate from the Dhaka South City Corporation came here and ordered us not to sell the rawhide at this place,” said Waliullah, adding the price instantly dropped below Tk 500 after the magistrate left.
Saber Hossain Tutul, a seasonal rawhide trader at the Science Laboratory intersection since 2005, expressed his frustration at the magistrate’s order. “They have never issued such an order and today they prevented us from selling the rawhide here.”
The crowd of seasonal traders thickened at the Science Laboratory intersection after 8 pm on Eid day. Mohammad Shahid, a representative of the Hemayetpur Royal Tannery in Savar, was found haggling with traders. At 8.30 pm, he pushed down the price to Tk 500 for the same size of rawhide he bought at Tk 600-700 in the evening.
“We bought around 150 pieces. The biggest ones we bought for Tk 700 each, but now they are selling at Tk 500,” he said.
Another seasonal trader, Yaar Hossain, 27, from Kathalbagan came with 25 pieces of rawhide. He bought 40 pieces of rawhide at Tk 700 each but now the buyers are only offering a maximum of Tk 650 for each piece, he said. “It’s a big loss for me if I sell these at a price below Tk 800.”
Alamgir Hossain, a seasonal trader of 25 years, was sitting with a collection of around 1,000 pieces of rawhide at the Azimpur intersection. “Right now I’m just buying these. I’ll see who offers a better price before I sell."
NO TRAFFIC JAM AT POSTA
Every year, trucks full of rawhide enter the neighbourhood of Posta in the evening of Eid day, causing a severe traffic jam. Even pedestrians cannot walk properly due to heavy congestion. Traffic congestion spreads as far as Azimpur. Private cars or rickshaws, therefore, tend to avoid the Posta area on the evening of Eid-ul-Azha.
As an exception, this year there were no traffic jams in Posta even after 10 pm. The traders said that the low supply of rawhide on Eid day was the reason behind it.
Tarik Ibne Anwar, the owner of Anwar Wahab and Brothers, said they bought 10,000 pieces of rawhide last year.
This time they bought 4,000 pieces of rawhide until 10 pm, he said. As the price in the international market increased, he pushed up the cowhide price from Tk 800 to Tk 1,200 while buying.
“I’ll buy everything I get. But the rawhide supply is quite low in Posta this time and that’s why we have to pay more. The wholesalers and madrasa people are happy about it.”
Tarik and other traders said that the average price of rawhide can be determined after a week and not right after the trading on Eid day.
Anowar Molla, manager of Haji Kamal Uddin Wholesale Store, worried about the low supply of rawhide in Posta this year. “It seems not many people have sacrificed animals this year,” he said.
Molla said they bought around 1,200 pieces of rawhide until 10.30 pm. “We'll buy only big-sized animal skins and pay more for it if needed.”
As the night rolled on, wholesalers started to bargain and buy the rawhide straight from the trucks without waiting for them to enter the wholesale market. They were bargaining with the sellers, buying the rawhide and then deploying staff to guard the rawhide on trucks and pick-ups.
Liton Mia from Habiganj came to Posta at around 11 pm with 230 pieces of cowhide. He sold them off in a jiffy. “Last year I suffered a financial loss of Tk 150,000 but this time I made a profit,” he grinned. He bought the animal skins at Tk 300-400 from the villages and sold them at Tk 770 on average in Dhaka.
Wholesaler Sayem brought 2,300 animal skins from Munshiganj. As he saw there was a high demand, he asked his companions to bring more. He said he had a target of buying 4,000 pieces of animal skin and selling them.
Previously, only the traders in Posta used to buy the rawhide, but now some tanneries buy it directly, said Bangladesh Hide and Skin Merchants Association General Secretary Tipu Sultan.
“Also, some new wholesale stores emerged in Savar’s Hemayetpur to add salt to rawhide to preserve it,” he said, explaining the reason for the low supply of rawhide to Posta.
The wholesalers in Posta employed some extra labourers to offload and add salt to the animal skins after arrival.
On Jun 30, the government allowed rescheduling of loans with a 2.0 per cent down-payment for small businesses, tanneries and manufacturing companies related to buying rawhide from sacrificial animals.
The tanneries use 20 per cent of the rawhide collected locally and the remaining 80 per cent is exported as finished leather, said Tipu Sultan.
Bangladesh earned $1.02 billion by exporting leather and leather goods in the 2018-19 fiscal year, according to the commerce ministry. The figure dropped to $797 million in the following fiscal year. The earnings in the leather sector rose to $941 million in the 2020-2021 fiscal year and $1.24 billion in 2021-2022.