Rawhide merchants will have to get the commerce ministry’s permission to export untanned leather
With Eid-ul-Adha just around the corner, the government has decided to allow rawhide exports–for the first time in Bangladesh's history–on a case-by-case basis. The ministry will choose who may export rawhide and the permissible quantity for export.
Rawhide merchants will have to get the commerce ministry's permission beforehand to send rawhide abroad. Before giving the final go-ahead to a rawhide exporter, the government will assess the rawhide price of sacrificial animals, demand from the tanners and rawhide supply to the tanneries.
There will be no condition about the lower limit of the export price.
Commerce Secretary Dr Jafar Uddin gave an explanation about rawhide exports. He said rawhide will follow export procedures like rice. Though there is an export ban on the food staple, aromatic rice is being exported.
"This means the exporters will have to submit their export plan to the commerce ministry. We will examine the local market to verify whether the merchant will be allowed to send rawhide abroad," added Dr Jafar.
Despite huge demand on the foreign market, including the European Union, the government has never allowed rawhide exports since the independence of Bangladesh in order to preserve the interests of the local tannery industry.
The country used to export wet blue – semi-processed moist chrome-tanned leather – until 1989. The government banned the export considering the thriving footwear and leather goods industry.
The commerce ministry last year announced rawhide exports if the tanneries were reluctant to buy rawhide from merchants. However, the ministry drew back from the decision at the last moment.
Tanners said the latest government decision will threaten the leather, leather products, and footwear industry as rawhide export will make the raw material less available in the domestic markets.
Tanners said, "From last year's rawhide collections, they have semi-finished leather worth around Tk700 crore unsold. On top of that, leather from the previous years, worth nearly Tk2,800 crore, is piled up."
"We could clear the piled-up stocks if the government allowed us–exporting the semi-finished wet blue for six months. In place of allowing semi-processed leather exports, the government has opted for rawhide which will contribute to a shutdown of tannery businesses and unemployment in this sector," claimed Bangladesh Tanners Association President Shahin Ahmed.
Reasons behind govt rawhide exports decision
There are at least three reasons which compelled the government to lift the bar on exporting rawhide.
A lot of rawhide was dumped last year as tanners refrained from purchasing rawhide. Therefore, the ministry this year moves for exports instead of wasting skins of the sacrificial animals.
Recently, Commerce Minister Tipu Munshi at a programme said they learned the lesson last year and are considering rawhide exports.
Additionally, the novel coronavirus' fallout has piled up leather at tanneries and they are not likely to show interest in collecting rawhide this upcoming Eid.
Meanwhile, commerce ministry officials said that tannery owners had been paying less than the government-fixed rawhide prices showing overstock data. They even let the rawhide be dumped in many places.
A Trade and Tariffs Commission report sent to the commerce ministry last June also recommended rawhide exports.
"The local businessmen are less interested in rawhide purchases as both the demand for and price of leather have fallen on the international market due to the Covid-19 pandemic," said the report. It recommended rawhide export after fixing the lower price–considering the international market.
The commission proposed Tk30-40 for per square feet unsalted cowhide and Tk15-25 for goat hide this upcoming Eid. The prices were Tk45-50 and Tk15-20 respectively last year.
About fixing the lower limit for rawhide export prices, Commerce Secretary Dr Jafar Uddin said they do not have any plan to set it. Rather, the exporters would decide considering the market.
He said the government will fix rawhide prices for sacrificial animals this Eid on July 26.
'Inadequate number' of frozen containers to export rawhide
Tanners Association President Shahin Ahmed was doubtful about the rawhide export decision as the government had been giving leather entrepreneurs the utmost priority since independence.
"I better refrain from making any comments about why the government suddenly took such a decision," he said.
He said Bangladesh does not even have enough frozen containers to export the untanned cattle skins. Therefore, he was critical of seizing outputs of the export facility.
Half the cattle slaughtered in Bangladesh throughout the year is sacrificed during Eid-ul-Azha. Muslims slaughter around one to 1.15 crore cattle during Eid every year, according to a government estimate.
However, commerce ministry officials have predicted that the number of sacrificial animals could fall to 80-85 lakh this year because of the pandemic-led financial crisis.