Recently, before Eid-ul-Azha, the Commerce Ministry of the government has set the price of salted cowhide at Tk 50 to Tk 55 and goat skin at Tk 18 to Tk 20 per sq ft in Dhaka this year. However, 10 years ago in 2013, the price of salted cow hide was fixed at Tk 85 to Tk 90 and goat skin was fixed at Tk 50 to Tk 55 per sq ft. That resulted in a good price for the skins of the sacrificial animals, which benefited orphanages, madrassas and poor communities. Then on the day of Eid in the capital, the price of small-sized cow hides was between Tk 1,400 and Tk 1,800 each, medium-sized cow hides Tk 1,800 and Tk 2,500 and large-sized cow hides Tk 2,500 and Tk 2,800 each. Since 2014, leather prices have only been decreasing. As a result, the poor marginalized people were consistently deprived of but the middlemen traders and tannery owners benefited.
Since then the price of leather has fallen in the international market as well. Especially in the leather industry city of Hemayetpur, the big brands of Europe and America are not buying leather from our country because the pollution in leather processing is not stopped. Moreover, many tanners have left the business due to non-payment of dues by the tannery owners. As a result, the leather business is going through a severe recession. Traders say that one-third of the traders have left the business and joined other businesses after counting the losses in the leather business for many years. Only during the season a handful of traders show interest in the leather trade.
However, due to lack of environmental compliance in the country's leather processing and production, the demand for Bangladeshi leather products in the international market has never been as expected. Since 2017, the ongoing trend of the leather sector has started to decline. The crash in rawhide prices started in 2015. In 2015, cow hides came down to Tk 50-55 per sq ft and goat hides at Tk 20-22 per sq ft. In the last two to three years, it has further declined and in 2019 many hides were buried underground in different parts of the country, as traders were unable to sell them. There were also incidents of dumping in water and on roads. In some areas no leather buyers were found at all.
It is known that the country's leather and leather goods exporters continue to export on a limited scale, but buyers from the United States and Europe are constantly turning away due to the lack of LWG certification. Despite the availability of high quality leather in the country, large entrepreneurs import leather from abroad and manufacture and export leather shoes, bags and other products. Some big entrepreneurs import high-quality shoes, bags etc. made in the country, but keep the 'Country of origin' secret without writing 'Made in Bangladesh'.
Generally, UK-based 'Labour Working Group' (LWG) issues certificates on whether leather goods are produced in an environmentally friendly way. In this case, due to various complications, the tannery and leather goods manufacturing companies of Bangladesh do not qualify to apply for the certificate by fulfilling the necessary conditions. On the other hand, small tannery owners evicted from Hazaribagh have not yet been able to financially start business in their own plots in Savar. Many entrepreneurs in this sector became defaulters with various banks and because of that they could not collect new loans.
Leather and leather products are an export oriented industry based on domestic raw materials. It is a sector with immense potential in terms of national income growth, foreign exchange earnings through exports, employment and value addition. The Ministry of Industries has taken up a project through Bangladesh Small and Cottage Industries Corporation (BCIC) to develop an eco-friendly leather industrial city with the construction of a modern central waste treatment plant but due to various complications, it has not yet been fully implemented.
According to the government's Export Promotion Bureau (EPB) data, leather is the second top export product in terms of revenue after the garment sector. In 2020-21 fiscal year, Bangladesh earned through leather and leather goods exports $ 941.6 million, in 2019-20 fiscal year $ 797.6 million, in 2014-15 fiscal year $ 1130 million, in 2015-16 fiscal year $ 1160 million and in 2016-17 fiscal year $ 1234 million. Since then, the export of this sector has been a disaster. In the financial year 2017-18 it was $ 108.54 million and in the financial year 2018-19, it further decreased to $ 102 million. In the fiscal year 2019-20, it further decreased to $ 797.6 million.
However, in the fiscal year 2021-22, leather and leather products were exported to the tune of $ 1245.2 million, which was the highest ever. Out of this, only leather has been exported worth about $ 151.4 million and leather shoes or footwear made in the country were exported worth $ 756.2 million and other leather products were exported worth $ 337.6 million. On the other hand, the government had set a target of $1440 million for the export of leather and leather products for the last financial year 2022-23, but the export of leather and leather products reached $1120 million till last May.
Those who perform Qurbani buy animals and sacrificed them according to religious rules and ability. By selling animal skins, devout Muslims distribute the money among the poor, needy men and women, needy people, neighbors. However, a significant portion of animal skin is usually donated to various orphanages, mosques, madrasas. These institutes sell the collected skins and spend the money earned for the students and management of the institute. No one has ever questioned this age-old rule.
According to Islamic instructions, the proceeds from the sale of the sacrificial skins are distributed among the poor or donated to orphanages. This time too, in this case, extreme lamentation. A decrease in the price of leather means that the poor people of the country are affected and the country lost foreign currency. On the other hand, the buyer or demand side of animal skins is extensive. Here animal skin is used as raw material for many industrial products.
From essential shoes to luxury shoes, jackets, bags and other products are very attractive in the foreign market. As many leather products are essential, the demand for them has increased rather than decreased. As the population increases, the demand for leather products increases. As people's purchasing power increases, the demand for leather products also increases. Many say that there is a kind of farce going on with the price of raw hide. The price of everything increases, the price of leather products is sky high but in this case only the price of raw leather is reduced!
Quality of leather in Bangladesh is very good and labour is also relatively cheap here. As a result, there is a great potential for the development of the leather industry in the country. But due to negligence, mismanagement and short-sightedness of the government and the tendency of the traders involved in the leather industry to make short-term profits without giving importance to the environment, the development of this industry has been hampered. However, it is true that the demand for leather in the international market has decreased and despite the establishment of a leather industrial village in Savar, even today the traders have not been able to fully operate there.
As a result, it is not possible to process leather properly, so even this year seasonal traders are not getting the expected price of leather. Where the prices of all products are always on the rise but there is a decrease in the price of leather every year. Where does the uncertain future of this important industry stand? If the development of the potential leather industry is hindered, our national economy will also suffer. It is very important for the government to pay close attention to this potential sector. Expert in this regard raised question when the golden time of the leather industry will return again! The writer is a banker and columnist
