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Merchants ready for export as tanners eye local buying

Volatile rawhide market


FE Report | Published: August 16, 2019 10:43:10 | Updated: August 16, 2019 13:25:55


A worker carrying a headload of salted rawhide for a wholesaler at Posta in the city on Thursday — FE photo by Shafiqul Alam

Local merchants are preparing for exporting rawhide even as tanners start purchase from tomorrow (Saturday) amid domestic market volatility, insiders said on Thursday.

The traders are exploring the export markets and taking preparations for the shipments to China, Taiwan, India and Vietnam.

Business leaders will sit with the ministry of commerce on Sunday for expediting the process of export of the rawhides, they said.

General-secretary of the Bangladesh Hide & Skin Merchants Association (BHSMA) Tipu Sultan said they are taking preparation for the shipment of the rawhides as the government decided to allow exporters to export rawhide and skin after the drastic falloff in prices in the domestic market.

But Delwar Hossain, the association's president, told the FE since the decision on allowing rawhide export has come all on a sudden, traders are not fully prepared to start shipments.

"Firstly, we need to obtain export licence from the authorities concerned then we have to look for potential buyers," he said.

"We assume China, Taiwan, Vietnam and India can be our export destinations," he added.

After visiting the wholesale hub of Posta at Lalbagh, the FE found the collection of rawhides lower than that of the last year.

"We've purchased some 0.50 million pieces of rawhides of the sacrificial animals during the post-Eid period," Mr Sultan.

Last year, the merchants procured nearly 1.0 million pieces of rawhides, he added.

At Posta, this correspondent observed that the workers had been unloading salted skins of sacrificial animals arriving from different parts of Dhaka.

Tipu Sultan said the wholesale traders bought rawhide of different sizes from Tk 350-Tk 600 from the seasonal traders in the first two days of Eid while the price increased slightly by Tk 50-Tk 100 per skin during the last two days.

He said another Tk 250 is spend on per skin for preservation purpose and if the merchants can sell a salted rawhide at Tk 1,000 or above, it will be profitable for them.

He, however, said the supply of salted skin to Posta has almost stopped as many of the seasonal traders have stockpiled the skins on their own for getting better price.

He expressed the hope that the market would get better as soon as the tanners started purchasing salted rawhide from tomorrow.

Animal skins outside Dhaka will start arriving a week later, he added.

When asked about the losses of seasonal traders, Mr Sultan said since many of the small traders have little or no experience of the market trend, they expected prices beyond the capacity of wholesalers.

General-secretary of the Bangladesh Tanners' Association (BTA) Shakawat Ullah said that they had decided to purchase the raw hide from tomorrow instead of August 20 earlier announced to cool the local market.

"We hope the market will be stable when we start purchasing in advance," he said.

Asked about the fall in prices this year, Mr Ullah said they have shortage of funds for purchasing rawhides as they have bank loans they secured for setting up their factories at the Savar Tannery Industrial Estate.

"This is true that we have not been able to repay all the previous outstanding to the rawhide merchants and businessmen this season. It could also have had an impact on the market," he acknowledged.

Insiders said the government's immature decision, delay in export plan and the nexus between traders and wholesalers have dragged down the rawhide market.

Since the rawhide market during the last Eid-ul-Azha was also volatile, the government should have conducted a proper market study and taken preparation accordingly this year, they said.

About the possible impact of rawhide exports on the local footwear industry, secretary of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association Jainal Abedin said that the local industry might not be affected in the short-term.

"Bangladesh is not prepared yet for the export of the rawhides. It will take some time," he said.

Still, Mr Abedin feared if the government opens up export of rawhide and continues it in the future, local footwear manufactures can be affected.

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