Tanners expect less business on Eid

LAHORE: The Pakistan Tanners Association (PTA) on Tuesday said it expects 40 percent decline in the prices of raw hides on Eid-ul-Azha this year.
Tanners association chairman Muhammad Musaddiq blamed the global recession in the leather market and anticipated cut in prices as reasons for the decline in the buying trend. The association expects to buy Rs7 billion worth of hides this sacrificial season as compared to the previous annual trend of Rs12 billion.
He also pointed out the liquidity problems faced by PTA members and leather industry due to the pending customs duty drawback claims, and sales tax and income tax refunds, which have limited the purchasing capacity of the tanners. The PTA had already demanded the government on different forums to release their pending outstanding claims of billion of rupees expeditiously for Eid-ul-Azha.
The representatives of leather industry presented facts and figures causing decline in leather export in a meeting with the finance and commerce minister and Federal Board of Revenue chairman on September 10, 2015 as well as the prime minister on September 11, 2015 for exporters associations’ meeting in Islamabad.
The PTA chairman demanded the government to ensure uninterrupted supply of power and gas to the tanneries in Karachi, Lahore, Kasur, Sialkot and other cities which is imperative for the smooth processing of hides and skins collected on Eid-ul-Azha.
The other side
This year approximately 7.3 million raw hides and skins are expected to be collected in the three days of Eid-ul-Azha.
As per expected numbers, the collectors would be able to get 2.5 million cattle (cow/calf) hides at Rs1,500-1,800 each, four million goat skins at Rs175-225 each, 0.8 million sheep skins at Rs125-175 each, and almost 30,000 camel hides at the unit price of Rs800-1,000.
The tanning industry does bulk buying of hides and skins on Eid-ul-Azha which meets more than half of the industries total requirement.
This year however, the PTA believes that the demand of leather exports reduced due to recession and currency depreciation in the international leather market, a claim the collectors’ associations say is a rumour to bring down the prices of the commodity.
A representative of a leading hides collectors’ organisation said that it was attempt to crash the hides and skin market this year, so that the tanners will benefit from lower rates. He said that revenue collected during Eid season is almost 40 percent of their total annual revenue.
The government has already strictly banned the collection of hides and skins without district management of the respective districts under the ongoing National Action Plan (NAP). Thus, it is expected that a huge quantity of hides and skins would be mishandled, which will negatively impact the national exchequer and exports.
The stakeholder in the hide collecting business said that the Competition Commission of Pakistan (CCP) should take notice of this in the larger interest of country.