No fair price for hides this year too despite govt rate hike, export permission

Despite a government-approved increase of Tk5 per square foot in hide prices this year and permission for export, rawhide was not sold at government-set rates in many parts of the country. Although cowhide prices rose slightly compared to last year, sellers and traders could not secure fair prices anywhere.

According to industry insiders, tannery owners were reluctant to purchase hides because of the failure to properly develop the Central Effluent Treatment Plant (CETP) and solid waste management systems at the Tannery Industrial Estate. 

Although traders and madrasas collected hides from different regions, they lack proper storage facilities. As a result, there was limited enthusiasm to collect slaughtered animal hides across the country within a short timeframe. However, some local madrasas and traders said they stored hides themselves with the aim of selling them later at a better price.

Momin Ullah, a teacher at a local madrasa in Bajra village of Noakhali's Sonaimuri upazila, collects hides every year. This year, their madrasa collected 103 hides, each bought at an average price of Tk520, although in other parts of the same upazila prices ranged between Tk350–Tk450 depending on size.

Momin Ullah told TBS, "Prices were slightly higher than last year but still not satisfactory. The government's fixed rates are nowhere to be found in the market. In some places, hides were sold for just Tk200–250. The government did provide salt, but we are not selling now. We'll wait about a month to see if prices improve– otherwise we'll face losses."

Recalling past experiences, he added, "There used to be strong syndicates. Even if the government fixed prices, only one trader would operate per police station area, not allowing others to enter, which drove prices even lower."

As in Noakhali, hide prices in other districts were also below the government-set rates, ranging from Tk350–550 each depending on size. Shahadat Hossain, a seasonal hide trader from Shibganj in Bogura, told TBS, "I bought medium-sized hides at Tk400–500 each and managed to sell them at Tk600–700."

In Dhaka, hides were sold for Tk600–800 each this year. Traders, however, pointed out that the government's minimum price applies to salted hides. Additional costs of Tk300–350 per hide are needed for salt and labour.

Md Mizanur Rahman, proprietor of Ahsan Habib & Brothers in Savar, told TBS, "The Tk1,350 price set by the government is for salted hides. The hides sold immediately after slaughter are fresh and unsalted. Including salt and labour, each hide costs around Tk350–400 to process. This year, we bought hides for Tk650–1,100 depending on size, with most medium-sized hides costing Tk800–850."

On 26 May, the commerce ministry set prices for sacrificial animal hides. In Dhaka, salted cowhide was fixed at Tk60–65 per square foot (up from last year's Tk55–60). Outside Dhaka, the price was set at Tk55–60 (previously Tk50–55). The minimum price per rawhide was set at Tk1,350 in Dhaka and Tk1,150 outside Dhaka. Salted goat hides were fixed at Tk22–27 and salted sheepskins at Tk20–22.

According to leaders of the Bangladesh Tanners Association (BTA), tannery owners will begin purchasing salted hides in Dhaka within three days and in other districts from next week.

Md Mizanur Rahman commented, "We cannot export hides to Europe and the US due to lack of capacity. The government should pay attention to this. We have the production capability but can't utilise it."

For years, hide prices have remained at rock bottom. Tannery owners blame this on inadequate management capacity. To attract global brands and investment, they say, certification from the Department of Environment and the Leather Working Group (LWG) is crucial. However, due to inadequate CETP and solid waste management, they are unable to obtain LWG certification— resulting in buyers from Europe and the US avoiding Bangladeshi hides.

According to BTA sources, the "Common Chrome Recovery Unit" at Savar's CETP is still incomplete. The project, initiated in 2003, saw its timeline extended 12 times, with costs ballooning from Tk175 crore to Tk1,015 crore. The industries ministry declared it completed in 2021. Moreover, due to the lack of resource generation from solid waste management, clearance from the Department of Environment was not obtained, barring LWG certification for local firms.

Tanners expect 10-15% less rawhide collection this year

The leather industry is preparing for a reduced supply of rawhide this season of Eid-ul-Adha, with tanners expecting to collect around 80 lakh pieces, down from over 90 lakh last year. 

The decline is largely attributed to inflation, which has curbed people's spending on sacrificial animals, according to Md Shaheen Ahamed, chairman of the Bangladesh Tanners Association (BTA).

Despite the overall drop, the slaughter of cows and buffaloes may have slightly increased to approximately 50 lakh, driven by a rise in group purchases of larger animals, he estimated.

In contrast, the number of goats sacrificed is believed to have declined significantly to nearly 30 lakh, from over 50 lakh, he added.

The BTA plans to procure around 50 lakh cowhides in salted form, along with some buffalo hides and a small number of camel hides. However, widespread skin disease has damaged many of the cowhides, potentially reducing their market value.

Conversely, fewer goat sacrifices, coupled with greater awareness about proper hide processing, have resulted in better-quality goat hides this year, said Ahamed.

As of 10 June, about 4.05 lakh salted cowhides and nearly 50,000 goat hides had been delivered to Savar Chamra Shilpa Nagari, the country's main leather industrial hub, according to BTA.