The 2nd largest source of Bangladesh's export earnings is leather and leather products. Export income comes from leather and leather products after the ready-made garment sector. In the fiscal year 2019-20, the export income of leather and leather products is 79 crore 76 lakh dollars (Export Development Bureau).
But the main raw material of this sector is raw leather. About two and a half million raw hides are collected in Bangladesh every year. Out of that, 1 crore 25 lakh pieces of leather are collected during the sacrifice of cows, buffaloes, goats, sheep and other animals. Since the last decade, the market value of raw hide is almost non-existent. Once four-five maunds of cow hide was sold for three to four thousand taka, now it is sold for only taka 400-500. Once the price of a product increases in Bangladesh, it does not decrease again.
The only exception is leather. The price of rawhide has been declining for the last few years. Once a Khasi skin was sold for Tk 200-250 now it is sold for Tk 30-50. The exact reason for the decline in the price of leather must be found and solved.
In economics the price of a product is usually determined by supply and demand but here the market economy fails completely. This is called market failure in economics. Government intervention is needed to overcome this situation. There are other reasons why leather is not getting a fair price.
For example, syndicates of tannery owners and tanners. They influence prices and force sellers to sell leather at lower prices. Usually leather traders from the district level buy the leather during the sacrifice, salt it and supply it to the artisans and tannery owners in Dhaka. Allegedly, the money given to the owners of the leather industry before the sacrifice is used for investment in other businesses and purchase of fixed assets instead of repaying the loans to the traders. As a result, the flow of money to buy leather decreases.
Due to lack of money, the traders of the district buy less leather and the demand for leather decreases, resulting in a decrease in the price of leather. According to the general rules of economics, when the supply of a product exceeds the demand, its price falls. The price of rawhide in Bangladesh has been decreasing steadily for the past few years. But the price of leather in the international market is quite high. The price for the purchase of leather is set by the government. Due to the government this policy has not been implemented before. This is because the government does not have the monitoring and expertise to implement the price of raw hide once it has been fixed, as has been proven in previous years. Therefore, before the sacrifice, steps should be taken in this regard.
