China Reliance Deepens Crisis in Bangladesh’s Leather Industry
Photo: Agamir Somoy
Once considered a vibrant industry during Eid-ul-Azha, Bangladesh’s leather industry is now facing a severe downturn. In the past, the rawhide market would come alive during the festival, drawing attention from orphanages, madrasas, and seasonal traders alike. However, the market has now collapsed sharply. In various parts of the country, including Satkhira, Chattogram, Feni, and Brahmanbaria, hundreds of unsold cattle hides are being dumped on riverbanks, roadsides, and open spaces. In some areas, they are being buried or thrown into rivers, reflecting a deep crisis in one of the country’s key export sectors. No effective government intervention has been seen in this regard.
Multiple factors are driving this repeated collapse in the Qurbani hide market. These include government-set artificial price controls, loss of international markets, excessive dependence on China, a shortage of tanneries, lack of environmental certification, and a syndicate-driven market structure. Together, these issues have pushed the leather industry into an existential crisis.
At Nildumur ferry ghat in Shyamnagar, Satkhira, hides have piled up along the banks of the Kholpetua River, while in Feni, more than a hundred cattle hides have been dumped into the Katalakhali River. These scenes reflect not only local disruptions but also a broader structural weakness in the national economy. The most damaging factor is the government’s intervention in pricing within a free-market system, along with the shrinking export market. China remains the only major export destination, as buyers in Europe and the United States have largely withdrawn from Bangladesh’s leather market.
Every year before Eid, the government sets prices for raw cattle hides in Dhaka. This year, the price was fixed at Tk 60-65 per square foot in the capital and Tk 55-60 outside Dhaka. However, in many areas, actual prices did not exceed Tk 20-30, and in some places, hides remained completely unsold. Although leather exports have increased over the past two years, domestic prices have not risen accordingly. Seasonal and small traders continue to fail to receive the government-declared rates despite demand in the market.
Economists say that although the government sets prices administratively, it has failed to create the market capacity or demand to sustain those rates. As a result, the announced prices have effectively become symbolic. While a minimum price is declared, there is no effective monitoring mechanism to enforce it, leaving the market under the control of middlemen and syndicates.
Commerce Minister Khandaker Abdul Muktadir said the government aims to strengthen the leather sector and turn it into a more export-oriented industry by ensuring the maximum utilization of Qurbani hides. He added that a coordinated long-term plan for sector development, preservation, processing, and export capacity enhancement will be presented to the nation by July.
When contacted, Commerce Secretary (routine charge) Abdul Rahim Khan told Agamir Somoy that around 10 million pieces of hides are traded in a single day during Eid-ul-Azha, creating an unusual supply situation in the market. He said the government intervenes to manage this pressure.
Meanwhile, China has become the primary buyer of Bangladesh’s leather and leather goods. Industry stakeholders estimate that a large share of exports depends directly or indirectly on the Chinese market. This dependence is now becoming a risk factor. Due to China’s economic slowdown, reduced industrial production, and declining domestic demand, the country is no longer purchasing leather at previous levels, and even when it does, it is offering lower prices.
Experts say that Bangladesh has become trapped in a “single market dependency” after failing to access European and Western markets. European brands continue to raise concerns over environmental standards in the Savar tannery industrial zone. Due to the incomplete functionality of the Central Effluent Treatment Plant (CETP), many global brands are avoiding Bangladeshi leather.
Belal Hossain, Director of tannery Ayyub Brothers Limited, told Agamir Somoy on Friday that falling export orders have forced tannery owners to purchase hides at lower prices. He said the government must first address the root problems of the leather industry. If those issues are resolved, fixed pricing for Qurbani hides would have little impact. He added that the sector is currently overly dependent on the Chinese market and must move toward compliance standards, which requires government support.
Field-level traders allege that the rawhide market is now controlled by a few large groups and tannery owners, who coordinate to purchase hides at low prices during Eid. As a result, seasonal rural traders, madrasas, and orphanages cannot access a competitive market. In many areas, wholesalers deliberately arrive late to create fear of spoilage, forcing collectors to sell at lower prices.
Commerce Minister Khandaker Muktadir, however, said the government remains hopeful that coordinated efforts, active participation of traders and wholesalers, and mosque- and madrasa-based preservation initiatives will ensure that most Qurbani hides are collected in usable condition this year.
