Although Bangladesh's livestock population provides a significant resource of raw material for value addition, the export performance of the leather processing sector is poor. Internally sourced raw hides and skins (RHS) dominate the procurement structure, but are subject to cultural-religious traditions. This study seeks to investigate the extent that the three-day Festival of Sacrifice (Eid-ul-Azha), on which every year Muslims sacrifice millions of animals to Allah and which accounts for more than 40% of the annual RHS production constrains the industry's competitiveness.
Based on the global value chain approach, our findings are drawn from qualitative data. We show that Eid-ul-Azha leads to a temporary oversupply of RHS, which results in serious challenges in the organization of the value chain. Our results point to the special role of systemic trust ensured by religious requirements for sacrificial animals and thus RHS, which enables middlemen to enter the supply chain temporarily. Despite their flexible and voluminous small-scale collection, temporary middlemen lack experience and competences to adequately assess quality and price, thus affecting the competitiveness of downstream actors, in particular the tanneries.
Our findings complement the concept of global value chains by stressing the impact of culture-specific constraints, temporarily available resources and trust in relations to middlemen on the competitiveness of the export-oriented leather industry.