Rawhide businesses worry as salt price doubles in 3 months
Salt traders say that despite a record production in the just concluded fiscal year (FY22), salt prices went up owing to an imbalance between supply and demand
Rawhide traders and processors who see peak hours of their businesses during Eid-ul-Azha every year are now worried as the price of salt, the key raw material of the industry, costing double the normal price in the past three months.
"Salt is the key ingredient of the leather industry; Some 8-12 kg of salt is needed to process a single rawhide. We were already forced to raise leather prices [which had a negative impact] amid the pandemic. Now, increased salt prices have appeared as a new struggle for us," Mokhlesur Rahman, director of RIFF Leather, told The Business Standard.
"Because of the increased salt price, the processing costs of rawhides have increased by at least 50℅," said Moslem Uddin, former general secretary of the Chattogram Rawhide Warehouses Association.
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For example, the processing cost of a square foot of rawhide earlier was just Tk10-12, which is now Tk18-20, he told TBS. "The salt price hike might have an adverse impact on the large-scale rawhide process and preservation during the Eid."
A sack (74 kg) of salt is now selling at Tk1,100-1,200 at Chattogram's Khatunganj, the country's largest wholesale hub for essential commodities. The price was only Tk550-600 in early April. The enhanced price means an increase of Tk7-8 per kg.
Besides, the price of a 25-kg sack of iodised salt has also jumped from Tk580-650 to Tk780-820.
Salt traders say that despite a record production in the just concluded fiscal year (FY22), salt prices went up owing to an imbalance between supply and demand.
"Demand for salt increased disproportionately with regard to local production in the last couple of years. As a result, the country needed to import salt," Md Farid Uddin, proprietor of the Chattogram-based wholesaler Kohinur Salt, told the Business Standard. Agreeing with him, several others added that irregular supply and demand during the pandemic also contributed to the price hike.
In FY22, the country produced some 18.32 lakh tonnes of salt, up by around 11% year-on-year, according to the Bangladesh Small and Cottage Industries Corporation, whereas demand for salt was 23.35 lakh tonnes.
Production was 16.51 lakh tonnes in FY21, 15.70 lakh tonnes in FY20, and 18.24 lakh tonnes in FY19, while demand was 22.56 lakh tonnes, 18.59 lakh tonnes, 16.57 lakh tonnes, in that order.
"Production surged thanks to an increase in farmers' interest and the area of land given over to the production of salt," said Bangladesh Small and Cottage Industries Corporation Director for Chattogram Mohammad Zakir Hossain.
"In FY22, the number of farmers was 37,231, which had been 27,697 in the previous fiscal. The amount of cultivated land also increased to 63,000 acres," he added.
