Tanners plan to offer lower rates than last year to buy raw hides of sacrificial animals, due to a drop in demand for leather and leather goods in the international markets.
Globally, leather prices declined 30-35 percent year-on-year in 2015 as non-leather footwear items gained popularity.
Moreover, 40 percent of the raw hides that were bought during last Eid-ul-Azha have remained unsold at the tanners’ warehouses due to low demand from buyers, according to Shaheen Ahmed, chairman of Bangladesh Tanners Association.
“The prices of raw hide will be lower than last year,” Ahmed said after a meeting yesterday with Hedayetullah Al Mamoon, senior secretary of the commerce ministry.
The purchasing price for per square feet of raw hide at the field level will be announced on Wednesday.
The tanners will fix the prices as it is their business, said Manoj Kumar Roy, additional secretary to the commerce ministry, who was present in the meeting. The ministry will have no part in it.
The prices will be fixed in line with global standards so that the raw hides are not sneaked out of Bangladesh, Ahmed said, while urging the government to take measures to check smuggling during the upcoming Eid-ul-Azha.
Every year, some seasonal traders create a countrywide artificial crisis to purchase the skins of sacrificial animals at low rates for smuggling to neighboring countries. This happens mostly in rural areas.
Last year, the rate for per square feet of cowhide was fixed between Tk 65 and Tk 70 in Dhaka and Tk 60 and Tk 65 outside the capital.
It was initially feared that there will be a shortage of 10-12 lakh pieces of hides after India, the major cattle supplying country, had imposed a ban on exports of cattle to Bangladesh ahead of Eid-ul-Azha.
But cows are now arriving from India, so a crisis is very unlikely, according to the BTA chairman. The Eid-ul-Azha, when Muslims slaughter 60-65 lakh cattle, meets half of the demand for raw hides of tanners.
In fiscal 2014-15, exports of leather and leather goods crossed the $1 billion-mark for the second year, according to data from the Export Promotion Bureau.
Bangladesh shipped leather and leather goods worth $1.13 billion last fiscal year, making it the second highest contributor to national exports after garment.
Italy, the UK, Belgium, Spain, France, Germany, Poland, the US and Canada are the big markets for the sector. In recent years, exporters have done well in Japan, India, Nepal and Australia as well.
The country aims to export $1.21 billion of leather and leather goods this fiscal year.
Bangladesh now caters to only 0.5 percent of the global leather and leather goods market worth $215 billion, according to industry insiders.
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