The Financial Express

Lifting ban on export of wet blue leather  

| Updated: July 17, 2021 21:43:02

Lifting ban on export of wet blue leather   

The lifting of restrictions on export of wet blue leather has produced mixed reactions. In view of the drastic slump in prices of raw leather in the last couple of years causing colossal wastage, it seems the government found a convenient justification for lifting the ban on wet blue leather --- a primary stage of leather processing when the leather is tanned, but not dried, dyed or finished. It is well known what happened in the past years at the time of Eid-ul-Adha--- the big occasion when 50 per cent of the country's raw hides and skins got collected from all over the country. Although the  government in consultation with the tanners and leather associations had set the prices ahead of the Eid-ul-Azha, small and seasonal traders who collected raw hides of sacrificial animals found it extremely difficult to sell their stocks to the wholesale buyers (aratdars) who eventually supply these to the tanneries for onward processing. The situation was unprecedented and looked like an ominous sign for the country's leather sector.  It could be gathered that lower prices of leather and leather goods in international markets had been the reason for lack of interest among wholesalers to buy raw hides.

Obviously, the government this time wants to avoid a similar situation, and thus allowing export of wet blue leather seems to be a solution. Such thinking is too simplistic and goes against the very purpose of restricting export of this stuff as a means of adding substantial value through further processing and production of finished leather and leather goods. It is for this reason that wet blue leather remained banned for export since 1990. After 31 years, this shift, a major departure from the policy of industrialisation, aims at ensuring unhindered collection of raw leather as well as fair price for the traders. News reports say that the government, so far, allowed six firms to export wet blue leather subject to certain conditions which among others include the validity period of export till June 30, 2022. Each of the firms will be allowed to export 0.2 million sq ft of wet blue to eight specific destinations.

Now the pertinent question here is: can this move fetch good price to traders and make collection of raw hides and skins smooth? There are other worries too. Will the number of firms be increased and the time of shipment extended? The worry is not for nothing, as it has been seen that initially five firms were allowed permission for export and soon the number rose to six. According to a FE report, Bangladesh Tanners Association president expressed his dissatisfaction over the government decision saying that extension  of the time beyond this financial year (FY22) might create serious problem for the domestic leather and leather goods sector.

The government tends to view the decision as a temporary recourse. Observers think that if the decision does not provide scope for any flexibility, the move though not very welcome, may be considered-one taken under unusual circumstances and not to serve vested interest.

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