Although the prices of commodities in general show an upward trend, the price of rawhide marks decline almost every year. The tannery owners are buying hides at a lower price on the ground that there is dearth of foreign buyers. As a result, the rawhide merchants are in difficulty. The Ministry of Commerce lowered the price of rawhides ahead of the last Eid-ul-Azha. Following the government move, buyers were found not available even at lower price.
Tanneries are of the opinion that there is stock of old hides and they do not need to buy new hides. Meanwhile, salt price has marked a rise of late. This has contributed to a rise in preservation cost of rawhides. Nevertheless, rawhide price has reached a new low allegedly because of the unfair practice by a vested quarter. Some traders, therefore, are of the view that export of rawhides could be an answer to help break the unholy influence of the syndicate.
Prices of rawhides came down in parts of Chattogram on the plea that China was not importing processed hides from Bangladesh. But the price was comparatively higher in the city areas and towns. Association of aratdars (large wholesalers) in Chattogram said they have achieved their target with regard to rawhide purchase.
However, traders across the country are now processing the collected rawhides. In northern districts, Natore is the biggest market for rawhides. Businessmen in Natore have purchased hides at a slightly higher price as they hope to sell the processed hides at a higher price. Tannery owners are likely to visit Natore soon and start buying hides. About possible smuggling through Natore, the law-enforcers said that they stayed alert to check any such smuggling.
It is said that hides worth Tk 2.5 billion have remained unsold since last year. If the tanneries do not buy hides in usual quantity, the rawhide traders may count big losses. Tannery owners are of the view that export earnings have declined because of low demand in international market. They are also suffering from financial crisis due to shifting of tanneries to Savar.
In fact, skin traders at times fall prey to some so-called syndicates in Dhaka and Jessore. The reality is that most of the marginal traders are facing losses this year.
This year, America has imposed 35 per cent value added tax (VAT) on import of hides and skins from China. Perhaps, that is the reason why China is not importing hides and skins from countries like Bangladesh as before.
There are heaps of rawhides at different places in the capital city. There are no buyers for these hides. Salt has been applied to these hides and skins. Most of this is in Posta of Old Dhaka. Rawhides have also been accumulated at Hazaribagh. Rawhides are also found available in the city's Jatrabari and Mirpur areas. Hides are also coming to Dhaka from outside the capital city. These are also found in Jurain of Narayanganj, Postagola, Kaliganj of Keraniganj etc.
Traditionally, there is boom in trade of hides just after the Eid-ul-Azha. But the situation is a bit different this year. Seasonal rawhide traders are facing a difficult time this year. They bought rawhides, but cannot sell those. Many tanneries cannot buy hides for want of funds. This is negatively impacting the tannery industry.
Many tanneries cannot buy hides due to fund crunch. Some are buying on credit. Traders at field level are not in a position to sell their products. They are keeping those hide in different places in the capital city. Although tannery industries have been shifted to Savar from Hazaribagh, most of the tanners have not yet received registration at Savar. As a result, they are not getting bank loans and hence cannot buy rawhides.
Businessmen at Posta said that Eid-ul-Azha is the best time for collecting quality hides and skins. Many feel that the tanners will buy hides when the price is further down. High price of salt has aggravated the situation only. Therefore, a pessimism is prevailing in the hides market this year. The seasonal traders are waiting in Posta and Savar, two big centres for rawhides, to sell their products. The authorities concerned should look into the issue for possible remedies.
Syed Jamaluddin is an economist and columnist.