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Merchants begin sale of rawhide to tanners after 8 days

Published : Tuesday, 20 August, 2019 at 12:00 AM  Count : 734

Workers loading a truck bound for a tannery with rawhides preserved with salt at a warehouse in Old Dhaka's Posta on Monday morning.	photo: Observer

Workers loading a truck bound for a tannery with rawhides preserved with salt at a warehouse in Old Dhaka's Posta on Monday morning. photo: Observer

Tanners in Dhaka have started buying rawhides at Posta in the capital from Monday, said Delwar Hossain president of the Bangladesh Hide and Skin Merchants Association (BHSMA).
He said, "We have decided to sell raw hide to the tanners for one week. We will decide the next step after the scheduled meeting on August 22 at FBCCI to sort out issues related to arrears."
"Rawhide outside Dhaka will take at least one week to come to Dhaka and we will be sold. We want to sell it to tanners but much of it depends on how and when they will pay our arrears, he said.  
Delwar said rawhide merchants in Dhaka and outside have around Tk 400 crore in dues with the tanners. "We hope the tanners will pay our arrears shortly."
Wholesale merchants and tanners are set to meet on August 22 under the auspicious of the FBCCI as the Industries Minister Nurul Majid Mahmud Humayun has asked them to settle repayment issue of arrears.
While visiting Posta area in the capital yesterday this correspondent found tanners buying rawhide from different points. The merchants are selling it in cash and some merchants are selling on deferred payment. They do not even know when they will get the money but they have no other way to wait with the stock.
The merchants claimed there was no syndicate in the market, they have been wrongly blamed.  Every year, tannery owners say many syndicates are active but it's not true.
If all the merchants had cash the market would have been competitive and price of rawhide would be high. Merchants said in many cases tanners have not cleared the arrears since 1990. We are hovering in uncertainty.
If the problem is not resolved, market of rawhide will face bigger uncertainty in future.
Shahidul Islam, owner of Haji Deel Jahan Mokam of rawhide said, "Tannery owners owe Tk 4 crore to me. Although I have bought 900 rawhides from seasonal traders and 800 pieces became waste for failing to buy enough salt as its price suddenly soared to treat rawhide."
Md Sakawat Ullah, General Secretary of the Bangladesh Tanners Association said, "We have not bought rawhide in the last two days due to misunderstandings between us."
However, tanners are buying rawhide from merchants in full swing from Monday. Tannery owners claim that they are buying it at government fixed prices.
Commerce Ministry sources said, per square foot cowhide price for Dhaka has been fixed Tk 45 to Tk 50 while Tk 35 to Tk 40 for the rest of the country. Besides, the price of male goat hide has been fixed at Tk 18 to Tk 20 while female goat Tk 13 to Tk 15 per sqft.
According to information from different sources, rawhides are not being sold and bought at fixed prices last year. As a result, the Ministry is urging the traders related with the rawhide business to be more responsible.
According to sources, about 70 per cent leather comes from sacrificial animals in the country. The process of rawhide collection will continue for the next two months.
Meanwhile, the BHSMA said they would resume sales to tanners and the FBCCI would act as a mediator amid a standoff between the two parties over dues.
A day after the association announced a halt to sales to tanners citing dues, the Commerce Ministry on Sunday called a meeting of the stakeholders of the leather industry to find a way out of the crisis.
After the meeting the association president Delwar Hossain said, "We've unanimously decided to resume rawhide sales from Monday."
An unusually low price of rawhide has precipitated a deeper crisis as traders are abandoning rawhide all over the country in absence of even a minimum price. The government decision to allow export of rawhide in this situation is not clear how it would immediately stabilize the market.  
Prices of rawhide were fixed this year by the government after a meeting with representatives of traders and tanners but it collapsed on the Eid day as traders and tanners started blaming each other for precipitating the crisis.  

Seasonal traders are blaming merchant traders for offering throw away prices apparently taking the market hostage to force them to sell at unusually low price.

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