Rawhide and skin prices fell by 39 per cent in last four years allegedly due to manipulations by syndicates of tanners and merchants.
The government fixes the price just as the two syndicates dictate, leather economists told New Age.
The undiminishing influence of the two syndicates deprives fair price to hide and skin sellers during Eid-ul-Adha, when over 50 per cent of supplies reaches the domestic hide market, they said.
The syndicates compel the sale of rawhide at throw-away prices, they said.
Leather economist and Dhaka University economics teachers Mohammed Helel Uddin said that the government plays in the hands of the influential tanners while fixing rawhide price before Eid-ul-Azha each year.
Bangladesh Tanners’ Association chairman Shaheen Ahmed, however, refuted the allegation and blamed low leather price in global market for the domestic market situation.
He also said that due to negative publicity over compliance issues, relating to workers’ rights and safety at factories as well as pollution, the tanners had been unable to sell finished leather of Bangladesh to the branded leather goods producers abroad.
He said that negative publicity over the compliance issues also reduced their power to bargain while exporting finished leather.
He said that making the tannery estate at Savar eco-friendly would help in overcoming the crisis.
Cowhide price per square foot dropped to between Tk 50 to 55 in the capital now from between Tk85 and 90 in 2013, show market records.
In the country side rawhide now sells for between Tk 40 to 45 per square, down from Tk 75 to 80 in 2013.
This year, rawhide retailers are under instruction not to pay more than Tk 1,000 for a medium sized cowhide, which sold for Tk 1,900 in 2013, said retailer Akhter Hossain.
Every year during Eid-ul-Adha, said Helal Uddin huge consignments of rawhides get smuggled into India due to its low price in Bangladesh.
He urged the government to fix the rawhide price in the domestic market at par with global price to prevent smuggling of an item, which is the country’s second highest foreign currency earner.
The hide price announced by commerce minister Tofail Ahmed on August 20 remained unchanged at last year’s rate.
The price for the current year, just as in the previous years, was fixed in consultations with the Bangladesh Tanners’ Association, Bangladesh Finished Leather, Leathergoods and Footwear Exporters’ Association and Bangladesh Hide and Skin Merchants’ Association.
While announcing the price for this year at his office, Tofail told reporters, replying to question, that the prices were fixed considering the dull business atmosphere for rawhide as good number of tannery factories were yet to shift to Savar to resume production.
Economists, however, said that the low rawhide price in the domestic market was adversely affecting the country’s ultra-poor groups as well as charities and religious organizations dependent on earnings from rawhides donated to them.
The Department of Livestock Services expects that around 1.10 crore animals, 44 lakh of them cows and buffaloes, would be slaughtered in the Eid-ul-Adha this year.
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