KARACHI: A dramatic fall of almost 80 percent in the value of sacrificial animal hides during a rainy Eid Al-Adha in Pakistan has strained the finances of the country’s religious and community welfare organizations, and taken away a huge chunk of raw material for the country’s leather industry, traders and analysts said.
Nearly 10 million animals worth an estimated $3 billion were sacrificed on the Muslim festival of Eid Al-Adha in 2017. That figure declined to 8.1 million animals last year with their hides and skins worth $32 million according to data shared by the Pakistan Tanners Association (PTA). 
This year however, Eid skins and hides were valued at $8 million. There were 6.6 million animals sacrificed, at a total value of $1.33 billion. 
“Last year, tanneries collected hides and skins worth Rs. 5.2 billion ($32 million) but now, purchases worth Rs. 1.31 billion ($8.2 million) have been made... a decline of 75 percent,” Agha Saidain, Chairman of PTA told Arab News, and added that the decline was “mainly due to rains.” 
On the back of record levels of inflation, and a currency devaluation that has seen Pakistan’s rupee losing more than 45 percent of its value against the dollar since last year, this year’s Eid Al-Adha landed in the thick of the monsoon season, with heavy rainfall and flooding affecting tanners’ reluctance to buy the hides which are easily destroyed by water. 
Apart from providing almost 30 percent of raw material for Pakistan’s leather industry, the multi-million dollar exchange of hides and skins was the primary contributor to the running of the country’s tens of thousands of religious seminaries, including those that were fronts for banned militant outfits. 
After the animal sacrifice, it is customary in Pakistan for people to donate the skins of the animals to religious and welfare organizations, which would in turn sell them to tanners for a profit.
“The hides and skins provided four to five months of financial resources to the madaris,” Nazir Nasir, spokesperson of Jamia Binoria, a Karachi-based Islamic educational institute, told Arab News, and added that the price decline had caused “trouble” for religious institutions. 
“But these are temporary phenomena,” he said, “Because the madaris never counted only on this source of revenue.” 
This year, members of religious institutions reported that most of the hides and skins they collected in donations were eventually destroyed by rains, as traders simply refused to buy.
“Last year, we fetched Rs. 1,600 to 2,000 on (a single) cow hide, but this year the situation is worse as large quantities of skins are being wasted,” Qazi Sadruddin, director of community services at Al Khidmat, a welfare organization running charity hospitals and orphanages, told Arab News. 
This year, there is also added pressure on the money exchanged from the buying and selling of hides and skins, as the country gears up for its next review in October from Paris-based terror financing watchdog, the Financial Action Task Force amid fears it could be blacklisted and heavily sanctioned if its money trails unwittingly end up in the wrong hands.
When business was booming, Eid Al-Adha generated an extraordinary cash windfall for thinly concealed fronts for outlawed and militant outfits in the country, like the banned Jamaat-ud-Dawa’s charity wing, the Falah-e-Insaniyat, whose head Hafiz Saeed had a $10 million US bounty on his head and was arrested by the Pakistan government in July this year. 
“The banned outfits now do not rely on hides and skins business as they have expanded their outreach to other avenues like properties etc.,” Rustam Shah Mohmand, a senior security and political analyst, told Arab News.
In sporadic incidents around the country, there were reports of arrests made by police during the transporting of hides and skins, but by and large, tannery owners said the lack of buying interest was triggered by humid and hot weather conditions. 
“Tanners are not ready to waste expensive chemicals (on compromised hides) due to heavy taxation,” PTA Chairman Agha Saidain said.
Pakistan’s leather products’ exports declined by 11 percent to $843 million in fiscal year 2019 from $948 million, Pakistan Bureau of Statistic data shows.
Tanners and leather goods exporters say that artificial leather, or polyurethane, from China has not only dented exports but also suppressed the demand of real leather in the international market, with China, India and Bangladesh investing heavily in technology to capture a major share of the $120 billion global leather market.
“30 to 35 percent of our hides and skins are wasted every year due to lack of modern technology and skills to preserve these products,” Syed Shujaat Ali, Chairman of the Pakistan Leather Garments Manufacturers and Exporters Association, told Arab News.
“In Saudi Arabia they have modern technology available that enables them to preserve the skins and hides on the occasion of Eid Al-Adha,” he added and called for greater research and development of the leather export sector, if the industry was to stay afloat.