Rawhide trade: Dull or bull?
Thursday, 27 December 2007
Shahiduzzaman Khan
Controversy over the number of sacrificial animals this year drags on after the print and the electronic media gave contrasting views on the issue. Some said the number of sacrificial animals was large in the city market, but their prices were low. Others stated the number of buyers was less this year compared to the availability of cattleheads and so the prices came down sharply. Yet another group claimed that the supply of the cattleheads in the city markets and elsewhere was less and so was also about the buyers also thronged the markets this year.
Conflicting reports apart, the media in general failed to explain why affluent section of the people did not participate spontaneously in sacrificing cattleheads. Most of them were hesitant about making the sacrifice, considering the prevailing socio-economic condition in the country. The middle class, tormented by recent price hike, came in large number to celebrate the Eid-ul Azha, being imbued with the spirit of sacrifice.
Country's teeming millions were left out of the celebrations due to nagging poverty. Sidr-hit survivors waited in long queues for a slice of meat distributed by the armed forces, following collection at different places. Many jailed business leaders, politicians and law makers observed Eid-ul Azha without fanfare and festivities and their relatives mostly refrained from sacrificing animals. To many, this year's Eid is different from so many previous years' Eid. This year's trend suggested that there was no competition among the richer section of the people in sacrificing animals. To be involved in such a competition in the name of Allah is a crime and prohibited in Islam, they contended.
This year's Eid gave the rawhide industry an estimated business of Tk 10 billion. The average quality of raw hides procured this year from animals sacrificed was finer as a good number of locally reared cows and buffaloes were slaughtered while a chilling weather also became helpful in keeping hides fresh. The smuggling of raw hides to India has reduced considerably this year as the prices remained high. The tanners were seen offering higher price for raw hides as the prevailing prices in international market for finished leather are likely to bring good business.
Procurement prices for raw hides were earlier fixed by the association at Tk 60-70 per square foot for cow and Tk 40 for goats. But the tanners are paying up to Tk 90 for cow and Tk 55 for goats. Processors and exporters of finished leather and leather goods are bothering little about extra costs as the appreciation of US dollar over the years also raised the value of exportable leather in taka terms.
About 3.0 million pieces of cow hides and 2.0 million pieces of goat hides were produced across the country this year. Of them, 0.4 million pieces were produced in the capital and its surrounding areas only. Bangladesh produces over 220 million square feet of finished leather (constituting about two per cent of its exports) from more than 7.0 million cows and 3.0 million of goats, slaughtered throughout the year.
The country exported finished leather worth $257 million in the past fiscal 2005-2006 ending in June while leather shoe that constitutes major portion of footwear (including sports shoe and jute made shoe) earns another $95 million from export. In fact, traders were receiving higher prices this year. With an increase of around Tk 400 per piece compared to that of the last year, the prices of salt-preserved cow skin, of larger sizes, ranged between Tk 2200 and Tk 2600.
Leather industry, country's third foreign exchange earner after the readymade garments and the frozen foods, is largely dependent on the holy Eid-ul Azha as 40 per cent of annual rawhide and goat skin are collected during the occasion. Last fiscal, the industry contributed more than $400 million in the country's overall export earning of $1.2 billion. Trend suggested that the export of processed leather may decline while export of shoes will increase under the present situation.
In another development, tanners are putting pressure on merchants to reduce prices of raw hides of sacrificed animals, though the latter claim that they have bought them at higher prices this year. Market observers fear that if procurement prices of raw hides are not increased by local tanners, merchants will sell them to smugglers who will supply them into the neighbouring Indian market where the prices are usually higher.
Meanwhile, local footwear factory owners feared at least 15 per cent shortfall in collection of rawhide compared with that of the last year. They said the collection rate of rawhide was poor this year as the people affected by cyclone Sidr did not sacrifice animals. The local tanners have the capacity to process 300 million square feet of rawhide a year, but they receive only 200 million square feet of rawhide for processing. As such, the government should lift import duty on rawhide and wet blue leather to help local footwear and leather goods manufacturers who face shortage of supply of quality finished leather.
Experts suggested that the government should set up some abattoirs on area basis at least in Dhaka and other metropolitan cities to maintain the quality of the rawhide. The hidden cost of collecting rawhide was very low this year due to less frequency of extortion and hijacking for improved law and order situation. In previous years, the skin collectors used to pay toll at different points during collecting and transporting hides. But the scenario was different this year. So the systems loss has been low.
Controversy over the number of sacrificial animals this year drags on after the print and the electronic media gave contrasting views on the issue. Some said the number of sacrificial animals was large in the city market, but their prices were low. Others stated the number of buyers was less this year compared to the availability of cattleheads and so the prices came down sharply. Yet another group claimed that the supply of the cattleheads in the city markets and elsewhere was less and so was also about the buyers also thronged the markets this year.
Conflicting reports apart, the media in general failed to explain why affluent section of the people did not participate spontaneously in sacrificing cattleheads. Most of them were hesitant about making the sacrifice, considering the prevailing socio-economic condition in the country. The middle class, tormented by recent price hike, came in large number to celebrate the Eid-ul Azha, being imbued with the spirit of sacrifice.
Country's teeming millions were left out of the celebrations due to nagging poverty. Sidr-hit survivors waited in long queues for a slice of meat distributed by the armed forces, following collection at different places. Many jailed business leaders, politicians and law makers observed Eid-ul Azha without fanfare and festivities and their relatives mostly refrained from sacrificing animals. To many, this year's Eid is different from so many previous years' Eid. This year's trend suggested that there was no competition among the richer section of the people in sacrificing animals. To be involved in such a competition in the name of Allah is a crime and prohibited in Islam, they contended.
This year's Eid gave the rawhide industry an estimated business of Tk 10 billion. The average quality of raw hides procured this year from animals sacrificed was finer as a good number of locally reared cows and buffaloes were slaughtered while a chilling weather also became helpful in keeping hides fresh. The smuggling of raw hides to India has reduced considerably this year as the prices remained high. The tanners were seen offering higher price for raw hides as the prevailing prices in international market for finished leather are likely to bring good business.
Procurement prices for raw hides were earlier fixed by the association at Tk 60-70 per square foot for cow and Tk 40 for goats. But the tanners are paying up to Tk 90 for cow and Tk 55 for goats. Processors and exporters of finished leather and leather goods are bothering little about extra costs as the appreciation of US dollar over the years also raised the value of exportable leather in taka terms.
About 3.0 million pieces of cow hides and 2.0 million pieces of goat hides were produced across the country this year. Of them, 0.4 million pieces were produced in the capital and its surrounding areas only. Bangladesh produces over 220 million square feet of finished leather (constituting about two per cent of its exports) from more than 7.0 million cows and 3.0 million of goats, slaughtered throughout the year.
The country exported finished leather worth $257 million in the past fiscal 2005-2006 ending in June while leather shoe that constitutes major portion of footwear (including sports shoe and jute made shoe) earns another $95 million from export. In fact, traders were receiving higher prices this year. With an increase of around Tk 400 per piece compared to that of the last year, the prices of salt-preserved cow skin, of larger sizes, ranged between Tk 2200 and Tk 2600.
Leather industry, country's third foreign exchange earner after the readymade garments and the frozen foods, is largely dependent on the holy Eid-ul Azha as 40 per cent of annual rawhide and goat skin are collected during the occasion. Last fiscal, the industry contributed more than $400 million in the country's overall export earning of $1.2 billion. Trend suggested that the export of processed leather may decline while export of shoes will increase under the present situation.
In another development, tanners are putting pressure on merchants to reduce prices of raw hides of sacrificed animals, though the latter claim that they have bought them at higher prices this year. Market observers fear that if procurement prices of raw hides are not increased by local tanners, merchants will sell them to smugglers who will supply them into the neighbouring Indian market where the prices are usually higher.
Meanwhile, local footwear factory owners feared at least 15 per cent shortfall in collection of rawhide compared with that of the last year. They said the collection rate of rawhide was poor this year as the people affected by cyclone Sidr did not sacrifice animals. The local tanners have the capacity to process 300 million square feet of rawhide a year, but they receive only 200 million square feet of rawhide for processing. As such, the government should lift import duty on rawhide and wet blue leather to help local footwear and leather goods manufacturers who face shortage of supply of quality finished leather.
Experts suggested that the government should set up some abattoirs on area basis at least in Dhaka and other metropolitan cities to maintain the quality of the rawhide. The hidden cost of collecting rawhide was very low this year due to less frequency of extortion and hijacking for improved law and order situation. In previous years, the skin collectors used to pay toll at different points during collecting and transporting hides. But the scenario was different this year. So the systems loss has been low.