Manipulation in hides and skins trading

Dhaka,  Monday,   2016-09-17
Published : 17 Sep 2016, 19:34:19

Manipulation in hides and skins trading

Syed Jamaluddin
Prices of cow hides of sacrificial animals are 30 per cent lower this year. Retail traders could sell the skin of a cow at Tk 1,300 to Tk 1,500 which is lower than last year by Tk 500.This year the price of cow hide was fixed at 10 per cent lower. Traders, wholesalers and tanners have informed that lower price is due to insufficient financing arrangement. The tanners have not paid a large portion of the dues of the wholesalers. That is why they could not buy  large quantities of skins. Tannery owners were not willing to buy hides and skins directly from retailers. Therefore, demand was low. Traders were reluctant to offer good price because of high price of salt in the market. Prices of hides and skins were reasonably good until the midnight of Eid day but prices started coming down after midnight. Many seasonal traders could not assess the situation. They bought hides and skins at high prices but sold those later at low prices.

Some tannery owners bought hides and skins directly from the market. Many collected hixdes and skins from the madrasas. This time buyers of skins were limited. Therefore, prices declined. Prices also declined in the international market. More than 50 per cent of hides is collected during Eid-ul- Azha. Healthy cows are slaughtered during Eid. So the traders are interested to buy the skins. Because of falling prices in the international market, 30 per cent of skins of last year are still in stock.

Related trade organisations had announced  that skins would be purchased at Tk 50 per sft in Dhaka and at Tk 40 outside the capital. Goat skin was to be purchased at Tk 20 per sft and the price of she-goat skin was fixed at Tk 15 per sft..Buffalo skin was fixed at Tk 25 per sft. Tannery owners said that they would buy the skins at prices already fixed. But as usual, these prices did not hold. Wholesalers are of the view that skin (after processing) would cost Tk 70 per sft.

Price of salt rose steeply on the Eid day because of short supply. According to traders,8 to 10 kgs of salt  are needed for processing one unit of skin. They had to spend Tk 100 extra for each skin. The government has given permission for import of 1,50,000 tons of salt. But this salt did not reach the country before Eid. Import of salt should have been arranged well in time.

A manipulative group consisting of tannery owners, stockists of Posta in old Dhaka, exporters of hides and skins and salt traders has created an unfavourable situation for trading in hides and skins. Tannery owners deliberately withheld payment of dues to skin traders. As a result, tanners could not buy skins for want of capital. So far nine million pieces of hides and skins have been collected but traders are not happy about it. Skins have been sold at throwaway prices. Prices were kept low. It is feared that these hides and skins will be sold with the help of smugglers to a neighbouring country. Processing of skins locally was also not satisfactory due to salt crisis.

Tannery owners are continuing their business in Hazaribagh. They are not eager to move to Savar industrial estate. Many tanners have not completed their infrastructure there. Every tannery owner is paying Tk 10,000 fine for not moving to Savar. It is not known how the problems will be resolved.

One rawhide merchant told a local news TV channel that traders from India already arrived in Bangladesh and were offering Tk 100 per sft. In India, price of per sft rawhide was between Tk 60 and Tk 90.The Border Guard Bangladesh (BGB) has been alerted to prevent smuggling of raw hides. The BGB members have already started patrolling the border.  

This time about 10.5 million cows, goats and buffalos might have been slaughtered across the country, according to a livestock official. The number of animals slaughtered this year was more than ever before, largely because of the increasing purchasing power of the people, availability of animals and low prices of animals on the last day before Eid. Leather is the second biggest export earning sector after garments.

In different districts, the seasonal traders had to sell raw hides after suffering losses. They purchased raw hides in villages and mahallas. After going to wholesale and make-shift markets, they found that price was low. It is alleged that wholesale traders lowered the prices but they are saying that the tanners have fixed lower prices.

In Nilphamari, skins of cows were selling at Tk400/Tk650. At Joypurhat, a cow hide was sold at Tk 400.This  cow produced 80 kgs of meat. At Panchagarh, a cow hide was sold at Tk 650. At Sirajganj, cow hide was selling at Tk700/Tk1500. But price was only Tk 200/Tk 300 when they went to resell it. At Dinajpur, supply was short so they had to buy at a high price. At Bogra, prices were low.

Tannery owners and big traders got together in a syndicate and fixed the prices of skins. Local and seasonal traders found themselves in difficulty. High price of salt has further caused the collapse of raw hide prices. In Chittagong, raw hides of sacrificial animals were sold at throwaway prices. Seasonal traders purchased hides with cash money but could not sell them and faced losses. Local wholesalers fixed a target of collecting 5,50,000 cow hides. Meanwhile, 3,50,000 pieces were collected and 2,00,000 pieces were processed in remote areas. Seasonal traders have already spent more than the amount fixed by the government. Big traders have adopted a go-slow policy. Some traders are saying that prices fixed by the government were not realistic.

The writer is an economist and columnist.

Editor : A.H.M Moazzem Hossain
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