The Financial Express

Disciplining the rawhide market  

Disciplining the rawhide market   

Of late, the tanners have agreed to purchase salted rawhides from the hide and skin traders. By visiting the wholesale market of rawhides from early this week, they are expected to scrutinise the product quality and start buying.

According to reports, they have agreed to buy the rawhides at the rates fixed by the government. Expectations run high that the seasonal traders who preserve their rawhides appropriately with salt within six hours of skinning of the animals will definitely get better prices than others.

Bangladesh Hide & Skin Merchants Association (BHSMA) projected availability of 8.0 million rawhides in the country from this Eid-ul-Azha. Although reports say a huge number of rawhides has been dumped or got rotten in the absence of fair price, the merchants think the number of wasted skin may not cross 100,000 pieces across the country.

Several tanneries have contacted rawhide wholesalers to visit their warehouses to examine the quality of hides and skins. The previous date of visit was due for August 20. But they are visiting earlier to buy salted rawhide from Saturday.

The merchants appear to be ready with some 0.50 million pieces of rawhides of the sacrificial animals this year which are stored in warehouses in and around Posta area of Lalbagh. Besides, it will take another week to bring preserved skins from outside Dhaka.

This year's drastic price fall prompted the government to mull the idea of allowing export of rawhides. Tannery owners and hide merchants traded blames over the issue. On the other hand, seasonal traders seeking to earn some extra money on the occasion were left in the lurch as they failed to sell their goods at a minimum price.

Bangladesh Hide and Skin Merchants Association leaders said that the prices of rawhides plummeted across the country due to cash crisis of traders as their payment for the last year's hides and skins worth Tk 3.0 billion remained due in several tanneries.

The selling price of cowhide hovered between Tk 150 and Tk 250 a piece while the average price of goatskin varied between Tk 10 and Tk 30 a piece this year. A good number of seasonal and small-scale traders incurred huge loss as they even failed to get the prices they had paid for procuring the hides.

The leather sector businessmen demanded this year that the prices of rawhide of the sacrificial animals be lowered by 40 per cent from that of last year on the excuse of 'slow demand' in the world market. However, prices  were not lowered and remained the same as last year's rates.

There is no denying that the seasonal traders have incurred a huge loss in rawhide and skin trading as price plunged lower than last year's. Many had to part with their goods at almost throwaway prices.

Bangladesh Tanners Association leaders said that the prices of rawhide fell due to the syndicate of hide and skin traders. The syndicate manipulated the market to gain excessive profit and tanners were not responsible for the price disorder as tannery owners always procure the items at the government-set prices from wholesale traders and not from the seasonal and small-scale traders.

Commerce minister Tipu Munshi admitted that manipulation by the traders was the reason for such drastic fall in prices of rawhide. He said the government had set the prices of rawhide in a meeting with the traders but the items were not traded at the pre-set prices.

In any case, the decision regarding export of rawhides should ideally be a matter of policy and not a crisis management ploy to steady the market as some high government functionaries have apparently attempted to do in the aftermath of the Eid-ul-Azha. Whether or not rawhides are allowed to be exported now or in the future, the tanners should, however, pay a proper price for the raw material.


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