AS the neighbouring India imposed restriction on cattle exports to Bangladesh since the Modi government swept into New Delhi, Bangladesh’s leather industry anticipates a crisis of rawhides this year. Series of reports carried by a national daily underscored that the country would face the shortage of sacrificial cattle up to 30 percent during the Eid-ul-Azha though tanners said their stock is enough to meet the falling demand of leather in domestic and global markets. Taking advantage of the shortage, a group of unscrupulous traders may charge exorbitant prices for sacrificial animals during the Eid-ul-Azha festival and increase the price of rawhides if immediate measures to import cattle are not taken by the government. Now curious minds are observing government’s steps and diplomatic strength to solve the problem with our most friendly neighbours.
The dried up flow of cattle from India has worried tanners beforehand who anticipate the price hike of rawhides in Eid market. When nearly half of the annual demand is procured.
Leather industry insiders said the situation might worsen during this Eid and the government should sort out the issue through talks with India as soon as possible. If the price upswing is abnormal, then it might create a crisis in the industry. Despite the restriction, the weaker euro, dropping demand and prices in international market and good stocks of rawhides may help in stabilising the domestic rawhide market. The euro is likely to be weak indefinitely and the currency will not gain value without sweeping economic reforms across the European Union which could be fortunate for Bangladesh’s leather goods exporters for an interim period.
According to industry insiders, sixty percent of the leather produced here go to the European Union countries, 30 percent to Japan, and 10 percent to other countries of the world. The price of square foot Bangladeshi leather has dropped by over 10 percent in the markets, and the declining demand also resulted in falling exports. The leather exports fell 21.36 percent to $397.54 million in last fiscal year, from $505.54 million a year ago. However, exports of leather products increased by 3.79 percent to $249.16 million in the last fiscal year, while the export of leather footwear rose by 27.81 percent to $483.81 million.
Data showed that around 70-80 lakh cattle are slaughtered throughout the year for meat but around 30-40 lakh are sacrificed during Eid-ul-Azha alone. Around 60 lakh calves are born a year in Bangladesh, and the country has to depend on about 20 lakh cattle from India to meet the demand. The Indian restrictions might create a crisis during this year’s Eid festival which will have chain effect round the year.
Now the government should take two steps – the first should be to diplomatically settle with India to remove restrictions of cattle export and the second should be to take steps to encourage cattle farming to meet internal demand. Otherwise, the leather industry – one of the major sources of foreign exchange earning – would suffer immensely.
