Rawhide merchants say they will resume sales to tanners; FBCCI to mediate

Rawhide merchants have said they will resume sales to tanners and the FBCCI will act as a mediator amid a standoff between the two parties over dues.

A day after Bangladesh Hide and Skin Merchants 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.   

“We’ve unanimously decided to resume rawhide sales today,” the association’s President Mohammad Delwar Hossain told the media after the meeting.

Prime Minister’s Advisor for Private Industry and Investment Salman F Rahman, Industries Minister Nurul Majid Mahmud Humayun and Commerce Secretary Md Mofizul Islam, among others, attended the meeting. 

The prime minister's advisor and the minister tasked the FBCCI with acting as the go-between, Delwar said and added the apex trade body has called a meeting on Aug 22 to resolve the problems.

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 rawhides worth at least Tk 3 billion this Eid.

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.

Ministers have said the government will look into the allegation of market manipulation by a syndicate.

But the merchants’ decision to stop sales to the tanners until the dues are paid added a new twist to the crisis when the tanners were preparing to start buying rawhides from the merchants on Saturday following their promise to the government.

Delwar could not specify the dues but said it was more than Tk 4 billion accumulated since 2012.

Industries Minister Nurul said the government would not duck its responsibilities regarding the issue as leather is an “important industry”.

The government was making guidelines for the industry and seeking a permanent solution, he said.

Salman said he hoped the problems would be resolved through discussions.