Even though the government has increased the prices of sacrificial animal hides this Eid-ul-Azha, seasonal traders claim they failed to sell at the official rates, while tannery owners argue that raising prices alone cannot revive the market without addressing its underlying issues.
During the critical 72-hour post-Eid period, Dhaka's Posta area in Lalbagh received the highest volume of rawhide. Seasonal traders from various parts of the city brought hides to the Posta warehouse for sale but expressed frustration at being unable to sell at the government-fixed rates.
As per the new rates set by the Ministry of Commerce, salted cowhide in Dhaka was priced at Tk 60-65 per square foot, up from last year's Tk 55-60. Outside Dhaka, the rate was Tk 55-60, compared to Tk 50-55 last year.
Tanneries classify hides based on size: over 30 square feet is considered large, over 20 square feet is medium, and below 20 square feet is small. Based on the minimum rate, a large hide would fetch Tk 1,800, a medium one Tk 1,200, and a 15-square-foot small hide Tk 900.
But, seasonal traders reported selling hides for as low as Tk 500-800, significantly below government-fixed prices.
Altaf Hossain, a seasonal trader, said, "On the afternoon of Eid day, I sold hides at Tk 600 each. Even after waiting for hours quoting Tk 900, no buyers came forward."
Milon Sarker echoed similar sentiments: "No one measured hides by square foot. We sold hides for an average of Tk 600-900 per piece. Hearing the government had raised the price, many madrasa and boarding houses bought hides at higher prices, which landed us in trouble."
Warehouse operators at Posta stated that this year's market is worse than the previous one. "Buying at government-fixed rates would mean selling to tanneries at a loss," one wholesaler explained.
Tipu Sultan, Secretary General of Bangladesh Hide and Skin Merchants Association (BHSMA), said, "Many investors have withdrawn from the leather business this year. Several traders closely linked with the previous regime are now absconding, while others are struggling with liquidity. Traders who previously bought 10,000 pieces are now buying only 5,000."
He also mentioned that more than 30% of hides brought to Posta had already deteriorated due to lack of salt preservation. "Seasonal traders brought raw, unsalted hides. By the time they reached the market, many hides had spoiled or lost quality. Though the government set prices for salted hides, many ignored that directive," he said.
Adilur Rahman, Adviser to the Ministry of Industries, said while visiting the Savar Leather Industrial City on the third day of Eid that the government had distributed 30,000 tonnes of salt to aid preservation.
Asked why traders still brought unsalted hides, Rafiqul Islam, a seasonal trader, said, "Salt was distributed only at warehouses. Most seasonal traders didn't know where to get it for free. Some had to buy it, others couldn't afford it."
Sumon Mridha added, "I personally had to buy salt for the hides. A large cowhide needs salt worth Tk 100-150, while goat hides require at least Tk 50 worth of salt."
Meanwhile, following a visit to the largest hide market in Jashore's Rajarhat, the Commerce Adviser admitted that "anarchy" has plagued the sector for 15 years. "It's impossible to dismantle the powerful syndicate in a day. The ban on rawhide export has been lifted so that traders can sell abroad if local prices are unfavourable."
But, BHSMA's Tipu Sultan dismissed the move as impractical for seasonal traders and most warehouses. "If the government thinks exporting rawhide is that simple, they are mistaken. Exporting hides requires infrastructure and labour which warehouse traders lack. Saying 'export if prices are low' is simply reckless."
Syndicate or systemic failure?
Nazrul Islam Khan, former General Manager of Apex Tannery's leather division with nearly three decades of experience, disagreed with the syndicate theory. "Every year during Eid, people talk about syndicates, but no one has ever identified who they are. The real issue lies in coordination," he said.
Nazrul Islam pointed out the lack of alignment between government policies and tannery operations. "There's no training for seasonal traders on how to preserve hides. They don't know the basics. The standard is to bring hides to warehouses by noon and transport to tanneries by the afternoon. Instead, most hides reach tanneries around 10 or 11 at night-spoiled and degraded."
Mizanur Rahman, Secretary General of Bangladesh Tanners Association (BTA), said the Ministry of Commerce ignored rates recommended by the Tariff Commission. "They set prices for salted hides, but we tanners also buy raw hides directly. We targeted 8 to 8.5 million pieces but purchased only 375,000 raw hides. The ministry gave no pricing directive for raw hides."
He went on to say, "The ministry's own guideline set Tk 1,350 as the minimum for small salted hides, which, if calculated for a 17-square-foot hide, translates to around Tk 80 per square foot-completely contradictory to the official rate. Such unrealistic decisions initially pleased seasonal traders, but they were ultimately left disappointed."
Flawed foundations in leather sector
According to the Export Promotion Bureau, Bangladesh earned $1.13 billion from leather and leather goods exports in FY2015-16. That figure dropped to $961.49 million in FY2023-24.
Abul Hossain, CEO of Ima Leather Export, said the shift of tanneries from Dhaka to Hemayetpur in 2017 significantly affected the sector. "None of the relocated tanneries has obtained Leather Working Group (LWG) certification, essential for exports to Europe. As a result, the EU market is virtually closed. Now we mostly export to China, with smaller volumes to India, South Korea, and Japan."
Investigations reveal that the Central Effluent Treatment Plant (CETP) at Savar Tannery Industrial Estate (STIE) is still not fully operational, preventing LWG certification. Without it, exporters can't command higher prices abroad-leading to losses for both tanners and local traders.
BTA President Shahin Ahmed said, "We are now hostages to Chinese buyers. We're forced to sell at just 60 cents per square foot, when the fair price should be $1.20."
Although the government has fixed the local price of salted hides at Tk 60-65 per square foot, exporters often receive just Tk 70 per square foot-or even less-in international markets.
Unless the CETP becomes fully functional and local infrastructure improves, increasing local prices will only burden small traders and further jeopardise an already ailing industry, warned industry insiders.
Source: UNB