BUSINESSMEN in Peshawar, dealing in cattle rawhide, are facing considerable competition due to Afghans’ increasing market share.

“Afghans have taken over 30 per cent of the business in Peshawar, forcing several of the local entrepreneurs out of business in the last few years,” claims Asim Mehmood, a local rawhide dealer.

The price of rawhides of buffaloes and large cows increased by Rs600 to Rs800 per hide this year after Eid-ul-Azha as compared to last year. This would require the local dealers to arrange more investment to strengthen their rawhide stocks and maintain a steady supply to their clients from among tanneries in Punjab and Karachi.

Peshawar’s rawhide market, according to market sources, has also shrunk during the past few years. The provincial capital used to be the major market as rawhides from Mardan, Charsadda, and smaller towns till Hazro in Punjab were brought to Peshawar. However, of late, Mardan and Charsadda have developed their own markets and many rawhide dealers are operating from there, dealing with tanneries in Punjab on their own.

This has compounded the threat to local businessmen as Afghan entrepreneurs have also developed linkages with tanneries in Punjab and elsewhere.

The increase in prices of rawhides this year has primarily been attributed to rise in sacrificial animals’ prices, local businessmen say. The depreciation in rupee’s value against the dollar has also complicated things for local investors.

“Afghan businessmen bring in investment in dollars from their country as the dollar is commonly exchanged in the markets over there. In addition to that, Afghani is also far stronger than our currency,” says a local dealer Tajjamal Khan operating out of Peshawar’s Afridi Garhi rawhides market.

Mehmood, who owns and runs a rawhide business at Peshawar’s old market of Cinema Road, says several of the local businessmen disinvested their businesses during the past few years after being knocked out of the trade because of the entrepreneurial Afghan businessmen.

Khan says that there used to be 70 local businessmen doing business in the Afridi Garhi market, but now only 30 are in the trade. Afghan businessmen pose a greater challenge because they deal in both imports and exports.

While Afghans control the import business significantly, it’s their growing involvement in the export-oriented business that is worrying the local dealers.

“Afghans bring in two to three trucks of animal rawhides from different parts of their country on daily basis and store the consignments at godowns in Peshawar,” says Khan. Since they make bigger investment, they can afford to recover payments from tanneries in Punjab and Karachi, say market sources.

“We can give supplies on credit for two to three months, but Afghans attract the tanneries more as some of the tannery owners, at times, take four to five months in clearing the payments,” says Mehmood.

Another businessman of Peshawar’s Cinema Road, Shahnawaz says Afghan refugees have also formed groups of four to five members, pooling their investment together to do a joint business.

“These groups usually influence the market sentiments, causing prices to fluctuate,” he explains. They buy rawhides from butchers and commission agents at higher prices and store their stocks for months if they don’t get a good price from their clients in Karachi and Lahore. Local dealers, on the other hand, can’t put their investment on hold for a long period and prefer to sell their stocks before the summer months set in.

The provincial government can’t be of any help in controlling prices or regulating the rawhides market. “Our business has always functioned free of any intervention from the government,” says Mehmood.

However, federal government could play a role in curtailing Afghan refugees’ involvement in the trade by making it difficult for anybody to do business without getting registered as a business with the tax authorities.