Price slump spurs rawhide smuggling

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Ismail Hossain and Yasir Wardad | Published: September 18, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

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Low-down prices of rawhides and skins of sacrificial animals have spurred the smuggling of the potential item out of the country at large volumes than in previous years, sector-insiders said.  
Many opted for trading out the unprocessed leather as seasonal traders faced ruination for rock-bottom prices of the item during the domestic market glut.       
Tanners fear shortage of hides and skins for the industry this year, which may put leather and leather goods export on a slippery slope.
The fixing of lower prices of skins and skyrocketing salt prices put the seasonal traders in dire straits-and the misery is impelling them into smuggling, traders said.
On the other hand, a million orphanages and charity organisations are set to be deprived of a big amount which usually comes from prices of skins of sacrificial animals.
Hide prices are passing through a five-year low in the country-Tk 40- 50 per square foot (cowhide)--, according to the Bangladesh Hide and Skin Merchants Association.
As such, they had not got enough rawhides and skins till Saturday.
"We have so far collected 1.0 million to 1.2 million rawhides and skins until today, which is much lower than those of in the previous years," said BHSMA Secretary-General Tipu Sultan.
"We usually collect 2.0 million rawhides and skins within three to four days," he added.
Bangladesh Finished Leather, Leather-goods and Footwear Exporters' Association (BFLLFEA) President Md Abu Taher dubs the market very dull.
"Though there were more than 10 million sacrificial animals slaughtered, we don't see enough rawhides and skins in the market," he told the FE.
"Tanners are not purchasing hides, traders not buying too on a large scale; we don't know where the hides and skins are going to."
However, Border Guard Bangladesh (BGB) Public Relations Officer (PRO) Mohsin Reja refuted the allegation of smuggling in rawhide.
"BGB forces are vigilant on the border. No hide-carrying transport can go to the frontier areas," he said.
But the capital's largest rawhides marker still see a dull season at this high time of the trade.
Md Rashedul Islam, proprietor of M/S Mitali Hides, told the FE that the association has targeted to collect 4.5 million pieces of cowhide and 7.0 million pieces of goat and sheep skins this year.
He finds a decline in collection this year than that of last year.
"We hire seasonal skin workers for salting skins. A worker processes 10,000-12,000 skins with salt a week. In last five days, I have been able to process only 950 skins following poor collection," he said.
Many traders are hoarding skins amid much lower price of the item, he said.
BHSMA Secretary Tipu Sultan said the prices of the skins have been fixed 10 per cent lower following the fall in prices on the global market.
Citing the findings of Export Promotion Bureau (EPB), he said export income from raw leather declined last financial year.
And high prices of salt have been hurting both small-and large- scale hide traders.
"Government has shown negligence in keeping salt market normal," he alleged.     
The seasonal traders across the country are selling cowhide at Tk 400-Tk 1,000 per piece against Tk 800-Tk 2,000 of last year, according to the hide merchants' associations of eight divisional cities.
Traders with big capital, who are able to keep cowhides for at least a month, are set to make good profits while most of small-scale seasonal traders are going to incur losses, seasonal traders said.   
Md Ainul Hoque, a hide trader in Nilphamari district, told the FE that last year only goat and sheep skins were smuggled.
But the scenario is different this year. "Both cow and goat skins are being smuggled from the evening of Eid."
They bought medium-sized cowhides at Tk 650-700 each at noon of Eid day but big traders in Rangpur were offering Tk 400-Tk 600 each.
He said the government permission for salt import will only benefit big hoarders and tanners as they will get salt at low price when they would need it a month later.   
Mr Hoque said most of the traders threw away or graved in goat and sheep skins as prices fell by Tk 25-30 per piece.  
He said the Thengajhara border under Hatibandha in Lalmomnirhat, Haripur and Ranishonkoil in Thakurgaon, Haripukur in Parbatipur under Dinajpur, and Chhatnai in Dimla under Nilphamari districts are some key routes for skin smuggling.
Saidpur Hide Merchants Association president Md Azizul Islam told the FE that drug dealers have also been involved in the business.
He said local drug mafia are buying skins in the border areas and sending them out to India in exchange for contraband drugs like Phensidyl, Yaba, and Corex.
Meanwhile, the FE Rajshahi correspondent reported that a special report sent from the Home Ministry to local security agencies identified five reasons for smuggling of rawhide from the northwestern part of the country to India.  
The reasons as mentioned are: syndicate of local hide traders, evil competition in rawhide purchase, fixation of low price of hide at local market compared to international market, evil activities of seasonal hide traders and mentality of Indian hide traders to collect rawhide through alternative ways.
The report mentioned mainly due to these causes, rawhides are smuggled to India after Eid-ul-Azha.
Due to syndicate of large hide traders, small hide traders of the country were being deprived of getting proper price of hides and thus they were being encouraged to smuggle hides across the border.
"Large hide traders through a syndicate fixed rates of hides at divisional, district and upazila levels and procure hides at that fixed prices to earn a windfall profit. The price is always far less than the international market," the report was quoted as saying.  
"As a result of fixation of such price, rawhide sellers at the source and the retail purchasers of those are being deprived of a fair price of hides. At the same time, during the time of Eid, some seasonal middlemen appeared mainly from influential quarters of society," it said.
Those seasonal middlemen force the rawhide traders at the source to sell their procured hides to them at the price fixed by them.
The report further said Indian hide traders used to procure a huge quantity of raw hides and raw materials required for processing the hides from neighbouring Muslim countries. Those Indian hide traders are also learnt allegedly to have invested billions of rupees to procure smuggled hides from those neighbouring countries, including Bangladesh.
It is further learnt, every year, Indian hide traders fix the price of hides far higher than that is fixed by Bangladeshi hide traders here. As a result, the local traders, middlemen and retailers prefer to smuggle their procured hides at higher rates rather than selling those to local hide traders.
Due to such a situation, according to the report, local hide traders failed to procure sufficient raw hides for processing as most of those are smuggled out of the country at a comparatively high price.
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