An important part of our export industry is the potential rawhide industry and the position of this industry is after the garment industry. About nine percent of export earnings come from the finished leather industry and in this case, the collection of Eid-ul-Adha every year brings additional incentives to the industry. Due to various reasons, the country's leather industry has been in trouble for several years. In the meanwhile, the outbreak of COVID-19 worldwide has made the industrial sector even more miserable. After three consecutive years of disasters, rawhide prices are expected to rise slightly this time. Seasonal traders and hawkers have started collecting rawhides since the animal sacrifices. Tannery owners are also seeing the light of hope. The export sector has also achieved growth in the last financial year. Analysts in the sector say effective steps need to be taken to save the export-oriented industry, which is mired in various crises.
Like every year, the concerned ministry has re-fixed the price of sacrificial animal skins and considering the international market situation, the price of raw hides has been fixed by increasing the price a little more than last time. The price of salted cow skin has been fixed at Tk 40-45 per sq ft in Dhaka and Tk 33-37 outside Dhaka. Last year it was Tk. 35-40 in Dhaka and Tk. 28-32 outside of Dhaka.
However, the hope is that over the last three months, the price of finished leather in the international market has been rising slightly and in the meantime, the demand for leather in various countries of the world, including Europe, is upturning. As a result, it is expected that the price of rawhides may increase this time as compared to last time. For this reason, the seasonal traders are collecting rawhides by looking at the price fixed by the government. On the other hand, according to official data, after four years, the export of leather goods has returned to the just-concluded 2020-21 fiscal year. Despite the influence of COVID-19 in Bangladesh, the prevalence of COVID-19 in its main market European countries has started to return to normal. Due to this, the export order has also increased.
The catastrophe in the price of raw hides started in 2015. In 2015, the price of cow skin dropped to Tk 50-55 per sq ft and that of goat skin to Tk 20-22 per sq ft. The last two years it has been even more downward. Last year, the government fixed the price of cow hides at Tk 35-40 per sq ft in Dhaka, Tk 28-32 per sq ft outside of Dhaka and Tk 13-15 per sq ft for goat skin. Last year, the leather could not be sold and was buried in different parts of the country. Someone was thrown into the water and on the road. Absolutely no leather buyers were found in some areas. The same thing happened the year before. According to the Tanners Association, about 220 million square feet of rawhides is produced annually from Bangladesh; More than half of it was collected during the Eid of Qurbani and out of the total rawhides, 64.83 percent is cow, 31.82 percent goat, 2.25 percent buffalo and only 1.20 percent sheep. In 2014, the price of cow skin in Dhaka was Tk. 85-90 per sq ft, but this year it is Tk. 40-45 only.
According to the latest data from the Export Promotion Bureau (EPB), in the last financial year 2020-21, the export of leather and leather products earned US$ 941.6 million, which is 2.36 percent more than the target. On the other hand, in the fiscal year 2019-20, the income from leather and leather products was US$ 797.6 million. As a result, exports have increased by 31 percent during the year. On the other hand, in the 2014-15 financial year, Bangladesh earned US$ 1130 million by exporting leather and leather products. In the 2015-16 financial year, it increased to US$ 1160 million. In the 2017-18 financial year, this income increased to US$ 1234 million, which was the highest export income from the leather industry in the history of Bangladesh. Basically, since then in the name of disaster fallen in the export of this sector. In the 2016-17 financial year, it came down to US$ 1085.4 million. In the 2018-19 financial year, it dropped further to US$ 1020 million. In the 2019-20 fiscal year, it further decreased to US$ 797.60 million. It is to be noted that in 2019, the year before the COVID-19, a kind of chaotic situation was created in the country with the skins of sacrificial animals. There were cases where 10-15 percent of cow hides were thrown on the road and buried in the ground without getting the price. Again, 20 percent of the rawhides was damaged due to untimely salt, rain and heat.
Those who make sacrifices, they buy and sacrifice animals according to their ability and to religious rules. By selling rawhides, devout Muslims distribute the money among the poor, helpless men and women, the needy and the neighbors. However, a significant portion of rawhides are usually donated to various orphanages, mosques, madrasas. The money earned from the sale of the collected leather was spent by the students and the management of the organization. No one has ever questioned this age-old rule. So, although the supplier of sacrificial rawhides is apparently a devout Muslim, the vast majority of the benefits accrue to a large section of society. Devout Muslims who make sacrifices according to religious rites are therefore not in a position to bargain too much.
According to Islam, the proceeds from the sale of sacrificial rawhides are distributed among the poor or donated to orphanages. On the other hand, the buyer or demand aspect of rawhides is wide. Here rawhides are used as raw material for many industrial products. From essential shoes to luxury shoes, jackets, bags and other products are very attractive in the market of the country and abroad. Many leather goods are in great demand and demand for them does not decrease but increases. As the population grows, so does the demand for leather goods. As people's purchasing power increases and so does the demand for leather goods.
According to the research think-tank CPD, once the price of a product increases in the market of Bangladesh, it usually does not decrease. When the price of a product is determined, its price is determined not only by the raw material, but also by many factors. Such as factory rent, electricity, water, labor wages etc. Although the prices of raw materials have come down, they have not come down and it's possible because our consumers don't have rights. As a result, the price set by the producers of the product has to be accepted. Whether their production costs have been reduced or not is no longer verified. That is happening not only in leather products, but also in other products. Therefore, the organization thinks that it is possible to reduce this difference only if the consumers are aware of their rights and through the implementation of the consumer rights law.
For example, boys and girls used to go to school with their books in hand. Later they used to carry books in different polythene bags. But now even in remote areas, children go to school with books, clothes and many in leather bags. This is a manifestation of increasing purchasing power. Due to these reasons, the market for leather products is very stable. So the producers of leather goods, if the price of the product increases year by year, make a significant profit and should do so.
The official journey of leather industry in this country started on 3 October 1951. From Narayanganj the government brought the leather industry to Hazaribagh in Dhaka. But there was no waste treatment system. The tanneries dumped about 24,000 cubic meters of waste into the Buriganga every day. As a result, the water of Buriganga has been polluted year after year. To prevent environmental pollution, the government set up a leather industrial city in Savar in 2003 under the supervision of BSCIC on the direction of the High Court. This made it possible for the industry to stand on a solid foundation.
But not just in the leather industry, many businesses are now in the throes of COVID-19. Because the leather industry has been going through problems since 2015 and can't stand straight in any way, could not capture the Europe and American market due to some indecisiveness of BSCIC, lack of timely government incentives and lack of policy cooperation. The business is about to close due to the influence of COVID-19 on him for two years. The ministry has again formed three committees at the city corporation, district and upazila level for the proper management of the sacrificial rawhides. The work of the committees is to collect and preserve the sacrificial rawhides properly, to create awareness at the buyer-seller level, to ensure timely supply of the required salt to the skins at the respective places, etc. But marginal leather collectors say the committee is puppet committees, they are not active at all, collectors are not getting a fair price this year. So, how much responsibility this committee has fulfilled is now a big question.
However, in recent times, the demand for leather in the international market has increased, but despite the establishment of a leather industrial village in Savar, due to various problems, traders are not able to work there fully. We have to save our potential export oriented leather industry at any cost. Thousands of people's hopes, aspirations, dreams and future are involved in this industry. If the development of the potential leather industry is hampered, our national economy will also be ruined. It is very important for the government to take advantage of this potential sector and take long-term effective measures to save this export-oriented industry at any cost.
Md Zillur Rahaman is a Banker and Freelance Columnist