Merchants stop selling rawhide to tanners citing ‘billions of taka in dues’

Tannery owners have prepared to buy rawhide at the request of the government to keep the market calm, but a decision of the hide and skin merchants to refrain from selling to the tanners has added a new twist to the crisis.

Bangladesh Hide and Skin Merchants Association took the decision in a meeting in Dhaka on Saturday, saying they will not resume trade with the tanners until they pay dues.

The association’s President Mohammad Delwar Hossain could not specify the dues but said it was more than Tk 4 billion accumulated since 2012.

“Everyone in today’s meeting has been asked not to sell rawhide. The final decision will come in a meeting in the commerce ministry on Sunday,” he told reporters.

Some tanners went to Old Dhaka’s Posta, the rawhide trade hub, on Saturday morning following the previous announcement, but “it fully depends on the merchants whether they will sell or not”, Bangladesh Tanners Association Treasurer Mizanur Rahman told bdnews24.com.

Asked about the dues, he said: “Dues are a continuous process.”

The tanners were preparing to start buying rawhide from the merchants on Saturday following their promise to the government.

A large part of the demand for leather in Bangladesh is fulfilled through the rawhides of animals sacrificed on Eid. But allegations of the hides being sold for less than the price set by the government has been rampant this Eid.

The situation took a turn for the worse when wholesalers began offering meagre prices for hides or stopped purchasing it entirely. Seasonal traders subsequently dropped their stock on the streets to rot.

The traders fear the crisis caused destruction of rawhide worth at least Tk 3 billion this Eid.

Seasonal traders in Chattogram left on streets unsold rawhide of around 100,000 cattle on Eid day following a steep price fall, according to an official.

The government then lifted the bar on export of rawhide to ensure reasonable prices, leading to accusations from the BNP that it was plotting to destroy the leather industry.

Awami League General Secretary and Road Transport and Bridges Minister Obaidul Quader has said the government will try to find out whether someone manipulated the Eid rawhide market.

The government is determined to track down the alleged syndicate that is 'playing games' with the price of rawhides and skins of animals sacrificed on Eid, Information Minister Hasan Mahmud said on Saturday.

Its decision to lift the bar on rawhide export, however, failed to clear many things such as how the move will affect domestic industries or benefit general people and seasonal traders.

“Let’s see what happens. We will slow down [rawhide] export if we see a negative impact on the local industry,” Commerce Minister Tipu Munshi told bdnews24.com last Tuesday.

Merchant leader Delwar also admitted it would be difficult for them to start rawhide export, which he said has not seen in his lifetime.

They need to do many things like getting licences, find markets abroad and contact possible buyers before starting export, Delwar said.

He denied an allegation that the merchants created the situation to get the opportunity to export rawhide.

Owners of tanneries in Savar on the outskirts of Dhaka say they are not interested in rawhide of cattle slaughtered on Eid-ul-Azha this year as they are yet to sell those processed from last year. Photo: Mahmud Zaman Ovi

BLAMING EACH OTHER

The merchants and tanners have blamed each other for the situation.

“We would have been able to distribute the money to collect rawhide if they (tanners) had paid us,” Delwar said.  

He alleged the tanners had promised to pay the merchants on Thursday when the banks were open, but did not deliver on their words.

“Some even switched their mobile phones off,” Delwar said.

He also expressed ire saying all the stakeholders of the leather industry meet every year before Eid at the initiative of the tanners’ association but it did not initiate any such meeting this year.

Tanners’ leader Mizanur denied the allegations brought by Delwar, saying it was the merchants who created the crisis for extra profit.

“They will sell rawhide to us at government-fixed prices, then why they have paid low prices to the small traders?” he asked.