The government has taken a number of remedial measures to ensure rawhide fair price and storage, as well as to thwart vested quarters manipulating the market during the upcoming Eid-ul-Azha.
If these steps are implemented, it will be possible to overcome any crisis, an official said.
Last year, there was an unprecedented crisis over animal rawhide. As prices began falling, seasonal traders buried or dumped large quantities of rawhide while large numbers were damaged due to lack of processing.
When contacted, Commerce Minister Tipu Munshi told Bangladesh Post "We are trying our best to ensure that everyone gets a fair price. That is why we are talking to banks on banking facilities. They have given letters, so that at least this time, traders are given financial benefits. Even then, if no one can buy rawhide, we will open the door for export to all. So that a fair price is ensured.
We want the traders to buy rawhide and export it after processing. In this regard, discussions are going on with the Ministry of Finance. They are also following up the matter. Maybe they will arrange soft loans in this case.”
“At present, the government does not have the capacity to store rawhide in the country. In that case, if someone wants to store it locally for some time, and then sell it when they get a good price, we will cooperate with all kinds of facilities for him,” Munshi added.
A committee has been formed by industry, commerce, environment and forest, religion, information ministries, NBR, finance division, tariff commission, Bangladesh Bank and leather industry to take necessary steps for proper collection and preservation of rawhide during the upcoming Eid-ul-Azha.
Earlier, in October last year, a high-level task force comprising four ministries and several departments was formed to overcome the crisis of rawhide collection during the Eid-ul Azha and protect the industry.
The second meeting of the task force was held on June 22, where the providing of soft loans to traders was discussed.
It also said that the Fisheries and Livestock Ministry and Islamic Foundation, with the help of local administration, are providing training to seasonal traders and mosque Imams on rawhide collection and preservation.
Secretary to the Industries Ministry, KM Ali Azam, said the deputy commissioners will be ordered to take overall preparation for the management of rawhide with the assistance of public representatives, police, UNOs, seasonal hide traders and traders involved in the business.
The government provides loans every year to rawhide traders. Although the tannery owners were allocated Tk 696 crore for the purchase of rawhide on the last Eid-ul-Azha, the tanneries took loan of a total Tk 438 crore.
According to the Bangladesh Bank, the amount of loans disbursed in the leather sector is a little more than Tk 8,000 crore. Of this, more than taka 5,000 crore has turned into default.
A letter was sent to the central bank from the finance ministry on July 8 to gauge the current situation of the leather industry. The letter asked the tannery owners to take steps to give cash credit of Tk 500-600 crore at 3 percent interest on easy terms to buy rawhide during the Eid-ul Azha. It was further said that the decision was taken at the meeting of the task force to transfer the bank loan of the leather industry to 3 years in 2017-19 with interest waiver and transfer to block account in previous bank loan.
Industry Minister Nurul Majid Mahmud Humayun told Bangladesh Post “a task force has already been formed to ensure that people get a fair price for their rawhide. Export of raw hides / wet blue hides will be allowed if required considering the situation. I hope there will be no problem in collecting animal rawhide during Eid-ul-Azha.”
“In an effort to boost the tannery industries ahead of the Eid-ul-Azha, the government will take necessary steps to ensure financial assistance to the traders and proper management of rawhide,” he said.
According to Bangladesh Tanners Association, the tanneries bought rawhide worth around Tk 1,000 crore last year. About half of this is still unsold. Due to the coronavirus pandemic, exports to most countries, including China, the United States, the United Kingdom and Hong Kong, have stopped. Besides, many foreign buyers turned away from Bangladesh, alleging pollution in the tannery, resulting in exports falling sharply.
According to the Export Promotion Bureau, the total export earnings target for the leather sector in the 2019-20 fiscal year was $ 109.3 crore and achieved $79.76 crore.