Rawhide prices likely to be higher this year

Ismail Hossain The country's tanners have predicted that the prices of rawhides and skins would be higher this year than those of the last year. They made the prediction based on the increasing prices of the same in the global market, the growing demand of Bangladeshi leather and leather goods across the world and banks' promise to provide enough loans for procuring rawhides in the upcoming season. Insiders said the industry does not have last year's carried-over stocks of rawhides and skins much this year which means that the tanners have to purchase more rawhides of sacrificial animals this year. Bangladesh Tanners Association (BTA) has set a target of collecting 130 million square feet of rawhides in the upcoming Eid-ul-Azha with a view to meeting the increased global demand. "We've set a target of collecting 130 million square feet of hides during the next Eid-ul-Azha," said BTA Chairman Md Shaheen Ahmed. He said the increasing production cost of leather goods in Bangladesh's competitors like China and India has become a blessing for the country, which has pushed global buyers to choose Bangladeshi leather and finished leather goods. On Thursday night the two associations of tannery sector -- BTA and Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association (BFLLGFEA) -- sat together to fix prices for the rawhides this year, but they could not. "We'll sit again soon and hope that we will be able to let you know about the prices afterwards," said BFLLGFEA President Belal Hossain. When asked, he said, "Well, it's probable that there would be higher prices this year, but there would be greater number of sacrificial animals also, which may cause the price to lower." Each year ahead of Eid-ul-Azha, the industry leaders say that the prices of rawhides would be lower though the prices of leather and leather goods are ever increasing across the world. Asked why they do so, Belal Hossain said, "It is not true. The prices of leather and leather goods are always fluctuating." According to the market research firm Allendale, raw materials for the leather industry are more expensive and scarcer than ever before. "Cattle prices (which are relevant to leather goods) rose in the US by 7.3 per cent in 2013," according to Allendale of the United States. Global Leather Goods Industry 2013-2018: Trend, Profit, and Forecast Analysis, a research published by the prestigious RESEARCH AND MARKETS in February last said in recent years, the demand for leather goods industry has grown. "Industry revenue is forecast to reach US$ 91.2 billion by 2018, with a compound annual growth rate (CAGR) of 3.4 per cent, over the next five years," it said. "The competitive rivalry seems to be high due to the large number of players competing with each other to gain the market share. Consumer demand has been shifting toward the new design and innovative leather products with changing fashion trend and lifestyle," it added. Though tannery leaders declined to tell about the prices directly rawhides traders in city's Posta area said the prices would be higher this year. The merchants' association sources at Posta said the tanners put forward many excuses each year to keep the prices of rawhides at a lower level. Kazi Anwar Hossain, a trader in Posta from where the tanners purchase their rawhides, said prices of rawhides and skins of sacrificial animals would be around Tk 60-70 per square foot, which is higher than last year's rate of around Tk 50-60. The government has set a target of earning $ 670 million from leather and leather goods export this fiscal year (FY). Of the amount, $ 460 million will be from leather and $ 210 million from leather goods. The export earnings from leather and leather goods rose to $ 561 million in the last fiscal, posting a 23 per cent growth over the previous fiscal. In FY 2012-13, Bangladesh fetched $ 561.35 million by exporting leather and finished leather goods while during the previous fiscal (2011-12) the figure was $ 430 million, Export Promotion Bureau (EPB) data showed. The tannery association sources said the total demand for rawhides in the country is about 220 million cubic feet. Around 60 per cent hides are collected during the Eid-ul-Azha, more than 10 per cent during the Eid-ul-Fitr, 10 per cent during the Shab-e-Barat, 2.0 per cent during Kali Puja and the rest round the year, sources said.