Tanners and traders in stalemate on hide prices

Bangladesh
Published:  28 October, 2013

Raw materials traders are sitting on a huge pile of raw hides following Eid-ul-Azha religious festival due to the reluctance of local tanners to accept the prices they are demanding. Three associations representing the tanning industry had tried to fix the price of raw hides prior to Eid-ul-Azha when thousands of hides flood the market in a short period.

“We have almost kept our purchase of rawhide from the traders on halt due to the higher prices they are demanding,” said Md Shaheen Ahmed, chairman of Bangladesh Tanners Association (BTA). On October 11, the tanneries, in a bid to prevent traders from gaining a windfall at their expense, jointly announced the purchase rates for rawhides during Eid-ul-Azha, which are: Tk 85-95 ($1.09 – 1.22) for per square feet of salted cowhide in Dhaka and Tk 75-80 ($0.96 – 1.03) elsewhere, Tk 50-55 ($0.64 – 0.70) for goatskin and Tk 40-45 ($0.51 – 0.58) for buffalo skin.
“We will buy hides only at these prices at the factory level. We will not pay any higher than the declared rates,” Belal Hossain, outgoing Chairman of Bangladesh Finished Leather, Leather goods and Footwear Exporters’ Association, said at a press conference to announce the rates. Industry operators said if the tanners concede to the traders’ demand they would lose their cost advantage on leather and leather products in the international market. Ahmed of the BTA said the price would go up by $0.20 per square foot if the tanners buy at the current prices. 
Md Saiful Islam, senior vice-president of Leather goods & Footwear Manufacturers & Exporter Association of Bangladesh, said rawhide is now selling at $1.20-1.25 per square foot in India and Pakistan, while the Bangladeshi seasonal traders have bought at $1.5 per square foot. “It will affect the export of leather and leather goods. Besides, the country is already under the spotlight of the international buyers as the tanners are yet to relocate their environmentally hazardous production units from Hazaribagh to Savar,” Saiful said. The higher raw hide prices will come as a new setback for the export of value-added leather products, he added.

“There is ample demand for Bangladeshi leather and leather products on the international market. They [tannery owners] want us to accept prices below the rate at which we bought them during Eid, just so they can make higher profits,” said one trader preferring not to be named. Traders, including seasonal ones, have bought the raw hides at higher prices than the rate fixed by the tanners, which was much lower than the market rate then, said Ali Hossain, chairman of Bangladesh Hide and Skin Merchants Association. In the run-up to Eid-ul-Azha, tannery owners were buying good quality cowhide at Tk 100-105 per square foot, he added. On the other hand, the supply of rawhide this Eid is up from last year’s 5-5.5 million pieces to 6.5-7 million pieces.

But, Mohammad Abu Taher, the newly-elected chairman of Bangladesh Finished Leather, Leather goods and Footwear Exporters’ Association, expects raw hide collections to increase in the coming days as a salted cowhide can be preserved for over three months.

Source: The Daily Star

comments powered by Disqus