Falling prices to hit leather sector hard

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Jasim Uddin Haroon
Business in hides and finished leather is likely to face a tough time this year mainly due to sharp fall in the prices of the same in the international market coinciding with a huge stock-pile of last year, leading tanners told the FE Saturday.
The international prices of crust and finished leather fell to 90 cents from its earlier prices of US$ 1.50 each square foot following global financial meltdown.
Tanners claimed around 30 per cent hide and leather of around 200 million square feet remained unsold following the global economic crisis.
EPB data shows that export of raw hides dropped by 19.61 per cent from its target set for the July-September period this year.
"We are not seeing a bright future this year due to fall of prices in the international market. Tanners are showing less interest sensing the price might fall further," said Harun Chowdhury, president of the Bangladesh Tanners Association (BTA).
However, two organisations-BTA and Bangladesh Finish Leather, Leather goods and Exporters Association (BFLLGEA)) will sit simultaneously Monday next to fix prices of each square foot of raw hide for ensuing Eid-ul-Azha.
The prices for the raw cattle hides were Tk 70 for the city and Tk 60 for outside the Dhaka in the last year.
Local tanners procure around 40 per cent raw hides during Eid-ul-Azha. They claimed around 6.0 million cattle heads and goats are sacrificed during the period.
ABM Mashud, a senior leader of Bangladesh Tanners Association (BTA) told the FE that there was a huge stock of hides among the tanners which remained stock piled due to the fall in the demand following global financial crisis.
"I have decided not to purchase hides this year as I have huge stock of the same," Mashud who is also owner of Sarm Leather International said.
But tanners hinted that the number of sacrificial animals will rise this year due to the general elections.
"There will be good supply this year. We apprehend that the prices of raw hides at primary level will also be affected," said Abul Kalam Azad, a senior leader of BFLLGEA said.
Haji Mojibur Rahman, managing director of Sonali Hides said leather and leather goods are luxurious products and any financial trouble hits such items first.
"We procured hides last year depending on the international market trend, but it started to fall soon after the economic crisis emerged," he said.
Bangladesh exports raw hides to Italy, Japan, Korea and China apart from supplying local export-oriented shoe manufacturing units.
Bangladesh exported $ 284.41 million in the fiscal of 2007-08 and its target for the current fiscal is $ 304.32 million. Besides, Bangladesh also exported footwear worth $ 169.60 million, leather bags and purses worth $8.87 million in 2007-08 fiscal year.