Rajarhat’s small leather traders caught in high-price trap, facing capital loss

Rajarhat in Jashore, the largest leather hub in the southwestern region, has fallen under the control of a syndicate. Small and seasonal traders, caught in the web of high government-fixed leather prices, now face the risk of losing their entire capital.

They claim that although they bought the leather at higher prices following government-set rates, the wholesalers and warehouse owners are not paying accordingly. As a result, they are facing huge losses.

Disappointed small traders say that medium-sized cowhides are being sold at only Tk400–600 per piece, and large hides for Tk800–1,000. Goat hides are selling for just Tk20–30 each. But it costs them at least 1.5 times more to bring these hides from villages to the market.

On the other hand, warehouse owners say that even though the government set a price, they are not buying the leather. We must buy and sell at the price set by the tannery owners.

On Tuesday (June 10), the first trading day after Eid-ul-Azha, many small traders brought hides by local transport and stacked them at the market. Warehouse owners were seen checking the quality and bargaining over prices.

The traders claim they are being forced to sell at prices much lower than the government’s fixed rates. They allege that the syndicate of tannery owners and warehouse owners is controlling the market, leaving them unable to recover their investment.

Rajarhat is the second largest leather market in the country after Dhaka, with more than 300 warehouses. Traders from 10 districts of Khulna division, as well as Faridpur, Rajshahi, Pabna, Natore, and Dhaka, come here to trade every Saturday and Tuesday. Nearly 10,000 families in the region depend on this market for their livelihood.

During Eid-ul-Azha, leather worth around Tk100 crore is traded here over just a few market days. However, warehouse owners say the supply of hides is lower this year compared to previous years.

Alok Biswas from Koladigholia village in Lohagara of Narail, brought 100 cowhides to the market. He said each hide cost him Tk800–900 for collection, salting, and transportation, not including labor costs. But he had to sell them for Tk750 each, losing Tk200 per hide on average.

Alok added that, due to the government’s price declaration, people in the villages didn’t want to sell hides below Tk 500–600. Now, traders like him are on the verge of financial ruin after buying at the official rate.

SM Shamim, a trader from Dhaka, bought 2,000 hides at prices between Tk700 and Tk1,000. He said he can only buy at rates that tannery owners are willing to pay because he has to sell the leather to them. If he buys at higher rates, he risks losses.

Local warehouse owner Hasib Chowdhury bought 300 hides at prices ranging from Tk 500 to Tk 950. He believes the government didn’t properly coordinate with tannery owners when setting the prices. Since the tanneries aren’t following the set prices, market prices have dropped.

Both sides hope that the big weekly market on Saturday (June 14) will see better prices. Major traders and tannery representatives from across the country are expected to attend, possibly improving the situation.

Sayed Ahmed Nasir Shephard, former vice-president of the Greater Jashore Leather Traders Association, said about 6,000 cowhides were brought to Tuesday’s small market, but most sold for just Tk500–800, leading to losses for small traders.

He believes the main problem is the mismatch between government-fixed prices and actual market conditions.

Sayed further said, "All eyes are now on Saturday’s big market. A large volume of hides will arrive, and traders and tannery representatives from Dhaka and other districts will come. If competition increases, prices may rise again."