Everything sees price hike except hides

Hides were sold at higher prices than the fixed ones by the government in 2014.

At the instruction of then commerce minister Tofail Ahmed, Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA), Bangladesh Tanners Association (BTA) and Bangladesh Hide and Skin Marchant Association set a price of Tk 70-75 per square foot (sqft) of cowhide in Dhaka and Tk 60-65 per sqft elsewhere in the country.

But, rawhides with no salt were sold for Tk 90-100 a sqft in Posta of Old Dhaka’s Lalbag area on the day of Eid-ul-Azha that year.

Since then, prices of rawhide have decreased in phases over the past eight years, with hides never being sold at fixed prices. A disaster apparently hit the tannery industry in 2019 with many either dumping hides or burying them underground in various places of the country after failing to get a fair price and that drew flak.

The situation followed multiple initiatives taken by the commerce ministry. The last two years saw no such situation, but prices of rawhide of sacrificial animals were very low. And this year was no exception with rawhides being sold at lower prices than the price set by the commerce ministry in the capital’s Postagola on the day of Eid-ul-Azha on 10 July.

Last week after a meeting with traders, the commerce ministry increased the prices of salt-applied cowhides by Tk 7 per sqft to Tk 47-52 an sqft in Dhaka and Tk 40-44 an sqft elsewhere in the country.

The ministry also set the price of goat hide at Tk 12-14 an sqft and increased the price of castrated goat hides by Tk 3 an sqft to Tk 18-20 per sqft.

Price of a small size cowhide varied from Tk 200 to Tk 250 in Posta on the day of Eid-ul-Azha while price of a medium size cowhide varied from Tk 300 to Tk 750 and a large size cowhide was sold at a price from Tk 800 to Tk 1150. Majority of the traders were reluctant to buy small size cowhide, goat hide, with many traders even offering Tk 100 for a small size cowhide and Tk 10 for a goat hide.

Prices of almost everything are on the rise in the country whereas rawhide prices see fall. As to why this happens, traders in the tannery industry made several ‘common’ claims like they usually do. Wholesalers from Posta area said hide prices are low at the international markets. So tannery owners do not offer higher prices. Wholesalers also face a crisis of capital since they have large amounts of dues to the tannery owners.

On the other hand, tannery owners and leather-processing goods traders claimed brands from European Union and USA are not buying hides as the pollution of tannery industry is not stopped in Hemayetpur. Currently, China is the main buyer of Bangladeshi leathers but they pay less. On the other hand, tanners cannot sell hides at their factories in Hazaribagh since Rajdhani Unnayan Kartripakkha (RAJUK) declared this area red zone. As a result, tanners cannot pay their bank loans, causing a rise in production cost.

Despite everything, the export of leather and leather-processing products rose by 32.25 per cent to $1.24 billion (124 crore) or approximately Tk 115.87 billion (11,587 crore) in 2021-22 fiscal.

Not all claims of the traders are untrue. The government took 19 years to set up a tannery industrial estate on a 200-acre land since undertaking the project in 2003. Installment of central effluent treatment plant (CETP) is yet to be completed and work on the dumping yard, to be used for dumping solid waste, has not started either.

This year, tanners also fear pollution centering ng the Savar tannery industrial estate. They said the CETP does not have the capacity to process the amount of waste produced at tanneries during Eid-ul-Azha and it cannot be said for sure whether the pond that has been dug out to remove solid waste is adequate.

According to the Department of Environment, the CETP of the Savar tannery industrial estate is yet to go into full operation. The agency ran a test on waste samples on 6 June and found that the CETP is yet to reach the desired standard on total dissolved solid (TSD) and total chromium.

However, Bangladesh Small and Cottage Industries Corporation (BSCIC), the supervising agency of the Savar tannery estate, said this time they have taken measures to contain the pollution. Water metre and flow metre have been set up at tanneries in the current season in a bid to reduce production of liquid waste and distribution limit of liquid waste has been set in the proportion to production capacity of a tannery in light with the international standard. As a result, a tannery using more water than its demand or throwing liquid waste than its limit will be identified.

Speaking to Prothom Alo on Monday, president of BFLLFEA Mohiuddin Ahmed said global leather goods demand sees a downtrend and artificial leather dominates due to its low price. Several luxury brands in EU and USA are doing big business on leather-processed goods but they do not buy leather until it is processed in the environment friendly manner. So, certificate of the international organisation Leather Working Group will have to be taken by setting up an environment-friendly tannery industrial park.

Mohiudin Ahmed said, “We have been compelled to sell hide at $1 per sqft and it is possible to sell leather at 50-60 per cent higher price once tannery industry becomes environment friendly, and tannery owners need long term loan to revive their business. Then it is possible to earn $2-3 billion (200-300 crore) by exporting leather and leather-processed goods within two-three years and hide price will rise during Eid-ul-Azha normally.”

The BISCIC is in a disarray to set up the modern industrial estate in Savar’s Hemayetpur due to bureaucratic complexity and lack of experience. The BISICIC relocated tanneries to Hemayetpur from Hazaribagh in 2017 without preparing the industrial estate, causing a crisis for tanners. Hide price also fell, and there was no turnaround over the past three years despite many efforts of the commerce ministry. The root cause must be identified. Pollution of tannery industrial parks must stop and quick steps must be taken. Prices of sacrificial animals’ hides will increase only after the building of an environment-friendly leather estate. And, environment will be saved too.

*This report appeared in the online edition of Prothom Alo and has been rewritten in English by Hasanul Banna.