Govt Announces Salt Supply, Soft Loans for Leather Sector

The government has announced a combined support package for the leather industry ahead of Eid-ul-Azha, including the free distribution of 11,500 tonnes of salt and the introduction of soft loan facilities to ease liquidity pressure on traders.

Officials said the decision, approved by a government taskforce on 17 May, aims to ensure smooth handling of raw hides during the Eid season, when a surge in animal slaughter significantly increases demand for preservation materials and working capital.

Under the financial support plan, Bangladesh Bank has introduced special working capital facilities for leather traders. The measure allows fresh credit access for borrowers with rescheduled or classified loans until 30 June.

Banks have also been directed to maintain lending exposure to the sector at least at last year’s level to ensure adequate liquidity during the seasonal demand spike.

On the supply side, the government has initiated procurement worth Tk17.60 crore to distribute salt nationwide for preserving raw hides and preventing spoilage.

Officials said this year’s initiative builds on last year’s programme, when more than 8,000 tonnes of salt were distributed through educational and charitable institutions, helping preserve an estimated 13.8 lakh hides.

Demand is expected to rise further this year, with estimates suggesting 80,000 to 85,000 tonnes of salt may be needed for effective preservation during the festival period.

Data from the Ministry of Fisheries and Livestock indicate that around 1.23 crore sacrificial animals, including cattle, goats, buffaloes, and sheep, are expected this year, with total sacrifices likely to exceed one crore.

Despite sufficient national stock, salt prices have already increased ahead of Eid. The Bangladesh Small and Cottage Industries Corporation (BSCIC) reported that mills in greater Chattogram currently hold over 1.10 lakh tonnes of salt, with additional stock available at field level.

However, the price of a 74-kg sack used for hide preservation has risen by about Tk250 within two weeks. Mill-level prices now range between Tk930 and Tk950, compared to Tk680–Tk700 earlier this month.

Industry stakeholders blamed the rise on seasonal demand pressure, weather disruptions affecting coastal production, and inefficiencies in the supply chain.

The Salt Mill Owners Association said adverse weather and rainfall reduced field-level output, tightening short-term supply.

Salt is produced on around 70,000 acres of coastal land in Chattogram and Cox’s Bazar before moving through a multi-layer supply chain involving collection, milling, and wholesale distribution.

To ensure smooth Eid operations, authorities will distribute salt through cattle markets, retail points, and local administration channels at district, upazila, and union levels. Dealer lists will also be published to improve coordination and monitoring.

The government is also preparing a database of hide traders and warehouse operators, with plans for future formal registration.

In addition, training programmes are being arranged for butchers and mosque imams on proper flaying and preservation techniques to improve hide quality and reduce wastage.

The taskforce has further recommended uninterrupted electricity supply with stable voltage at the BSCIC Leather Industrial City in Dhaka for at least three months after Eid to support tanning and storage activities.