The rawhide collection drive for Eid-ul-Azha is again facing hurdles this year amid the coronavirus pandemic and a slump in leather exports.

The demand for leather in tanneries has declined due to the stagnation in the world market, according to merchants. In this situation, leather prices may be lower than last year, they said.

In the last season of animal sacrificing, piles of thousands of rawhides were left to rot in the streets over a dispute among tanners, merchants and traders. The relevant ministries are meeting at different levels this time to avert a major disaster.

Tannery owners said if the seasonal traders buy leather at the prices fixed by the government, they will not have to count losses unlike the last time.

In the previous year, tanners bought cowhides at Tk 45 to 50 per square foot in Dhaka and at Tk 35-40 in the rest of the country. The price of goat hide was set between Tk 13 and 20 per square foot.
The situation took a turn for the worse when wholesalers began offering meagre prices for hides or stopped purchasing them altogether. The seasonal traders subsequently dumped their stock in the streets to rot.

Wholesalers said they ran out of money due to bills not being paid by the tanners.

On the other hand, tannery owners pointed at rogue syndicates behind fall in rawhide prices at the field level and said merchants were still selling rawhides to tanneries at prices set by the government.

Tannery owners were accused of not paying the merchants a total of Tk 4 billion following a dispute in the last Eid-ul-Azha. The Ministry of Commerce and the Federation of Bangladesh Chambers of Commerce and Industries subsequently took initiatives to recover the dues.

The FBCCI had advised tanneries to pay off the arrears in three steps. It also called for a memorandum of understanding between the two parties.

Due to the pandemic, crust leather exports have come to a standstill.
The situation in the leather industry has been deteriorating since the beginning of this year, said Sakhawat Ullah, Secretary of Bangladesh Tannery Association (BTA). Many tanneries have closed down since January.

"Most of our business is dependent on China. When the virus appeared in China earlier this year, our orders started getting cancelled. Since then, tanneries have not been able to turn things around," he added.

Now the clients want to buy the products at stock lot prices, he said. There are some new orders but the prices are very low.
According to the Export Promotion Bureau, $1 billion worth of leather and leather products were exported in FY 2018-19 but the figure fell down to $797 million in FY 2019-20.