Lockdown will put tanners in jeopardy: Stakeholders

The tannery industry has fallen into a heap of trouble following the government's decision to impose a 2-week stricter lockdown after Eid-al-Adha, as the mandatory factory closures will make it difficult for tanners to process the rawhide quickly enough to prevent rot.

Industry owners are also concerned that the lockdown restrictions – introduced to tackle the rising Covid-19 infections throughout Bangladesh – might disrupt the buying and selling of hides.

This particular issue took centre stage as tannery owners participated in a virtual meeting with Commerce Minister Tipu Munshi on Thursday, held to set the prices of raw hides ahead of Eid-al-Adha.

Following the lockdown announcement on Tuesday, the Bangladesh Tanners Association (BTA) sought support from a number of ministers and secretaries to keep their tanneries open from 23 July to 5 August, but to no avail.

It even reached out to prime minister's Private Sector Industry and Investment Adviser Salman F Rahman in the hope of securing permission from the government, industry leaders said.

 Ministry sets rawhide prices

At the meeting, the ministry set the price of salted cow hides at Tk40-Tk45 per square feet in Dhaka, and Tk33-Tk37 elsewhere. It also set the price of goat hides at Tk14-Tk17 across the country, including in the capital.

Compared to the previous year, the prices of cowhide and goat hide increased by Tk5 and Tk2 respectively per square feet.

Urging the tannery owners to buy hide at the set prices, Tipu Munshi said the commerce ministry would stop approving wet blue exports if the hide prices became stable in Bangladesh.

However, the minister, Commerce Secretary Tapan Kanti Ghosh and Industries Secretary Zakia Sultana did not give the industry leaders assurance that the government will let them operate during the lockdown period.

According to the BTA, 155 tanneries operate in the leather industrial city of Savar, and around 35,000 people work there. Besides, several lakh people get involved with the hide trade during the Eid-al-Adha season.

The association is concerned about the fact that these traders will not be able to move around freely during the 2-week lockdown to buy and sell hides. Seeking a solution to this issue, the BTA had also sent a letter to the Federation of Bangladesh Chambers of Commerce and Industry's (FBCCI) President Md Jashim Uddin.

Speaking to The Business Standard, BTA President Shaheen Ahmed said, "Rawhide is a perishable commodity. If we fail to bring rawhides to Dhaka and process those at tanneries, they will rot. It is imperative that the government allows the tanneries to run during the lockdown.

At the meeting, Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh's (LFMEAB) President Md Saiful Islam said, "Ritual sacrifice of animals will continue till 23 July as per the rules. The stricter lockdown will begin that day, and continue till 5 August.

"But this is the period when hides are traded in markets across the country. Due to the lockdown restrictions, traders at the grassroots level might refrain from buying hides. On the other hand, collected hides could rot due to a lack of processing in time, as the tanneries will be shut for two weeks."

Saiful also proposed distributing salt free of charge at mosques, so traders at the grassroots level can preserve the hides for some days.

Quoting the Ministry of Fisheries and Livestock, Commerce Secretary Tapan Kanti Ghosh said, "Bangladesh has around 1.19 crore sacrificial animals this year. The traders at grassroots level do not preserve the hides with salt because tanners do not buy those at the set prices.

"Smaller traders cannot recoup the costs of the salting process by selling the hides."

He also asked the tannery owners to submit a list of their agents at the upazila level, adding that the list will be forwarded to district administrations across the country. "The administration will monitor whether the agents are buying hides at set prices."

The commerce secretary further said, "The demand for Bangladesh's leather goods has increased in the international market, so exports have increased too. The government has approved the export of 1.2 crore square feet of wet blue, and it will give approval for another 1 crore square feet.

"Due to the Covid-19 pandemic, fewer ritual sacrifices will be performed this year. Under the overall circumstances, the price for sacrificial animal hides should be higher than the previous year."

Meanwhile, Financial Institution Division's Additional Secretary Abdullah Harun Pasha said, "In a recent meeting, the Bangladesh Bank, along with managing directors of commercial banks in the country, had decided to provide around Tk600 in loans to traders for buying hides.

"Tannery owners who defaulted will be able to reschedule their loans after a 3% down payment."