Dhaka,  Tuesday
05 March 2024

Leather, leather goods defy inflationary pressure

Jannatul Ferduhsy 

Published: 02:24, 7 December 2023

Leather, leather goods defy inflationary pressure

Photo : Messenger

Exports of leather and leather goods from Bangladesh marked increase by 67.88 percent in November compared to the previous month, although the inflationary pressure has yet to ease.

According to the Export Promotion Bureau (EPB), leather goods exports rose to $99.96 million in November from $52.57 million in October. In July, it was $98.74 million, in August $123.82 million, and in September $72.67 million for the fiscal year 2024. 

The sector had set a target of $1.35 billion for leather and leather goods exports in the 2024 fiscal year, with exporters aiming for $10 billion by 2030.

Syed Nasim Manzur, the Managing Director of Apex Footwear Ltd, told The Daily Messenger, “It's only data, but the overall situation has not improved. The world markets are still unstable, with leather and leather goods exports continuously falling. Moreover, the largest markets in the EU are in an inflation crisis.” 

He also added that the potential sector needs the policy support of the government. If the sector receives subsidies, it might grow like the ready-made garment (RMG) industry. Additionally, Nasim advocates for a climate fund in the backward linkage sectors.

“We cannot ensure a water treatment plant for all the tanneries. If the government takes steps to provide financial support, the sector will boost the economy," Belal Hossain, former president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), told The Daily Messenger. 

In the last couple of years, 40 percent of the 155 companies have stopped exporting due to complaints, according to LFMEAB. Moreover, there is no policy in place for rawhide collection, and the government has yet to provide the required facilities in the newly shifted Savar tannery.

Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said, "While the war situation is calming, we hope the economy will turn positive. Although exports are consistently falling, it will be a challenge for the sector to overcome the economic crisis."

Meanwhile, the export of leather and leather goods reached $1,223.62 million in 2023, $1,245.18 million in the 2022 fiscal year (FY), $941.67 million in 2021 FY, and $1,093 million in 2020.

Industry insiders believe that if the export growth follows the trend, it could reach $1.5 billion by the end of the fiscal year. Unfortunately, the industry could not reach the target due to inflation.

Bangladesh has 2 percent of the world's total livestock population and can meet 1 percent of the world market's leather demand.

The most promising markets for Bangladeshi leather, leather goods, and footwear products include Germany, Italy, France, the Netherlands, Spain, Russia, Brazil, Japan, China, the UK, Singapore, Poland, the US, Canada, and Taiwan.

Previously, exports depended on wet blue leather, made by separating the fur from the skin and preserving it with salt. However, if raw leather can be further processed to produce finished goods, it can add up to 90 percent value to leather goods.

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