Leather, leather goods export fall by 18pc

Exports of leather and leather goods from Bangladesh have marked drop by 18.44 percent in the first quarter (Q1) as demand for these items fell in the international market due to high inflation.

According to the Export Promotion Bureau (EPB), leather goods exports fell to $267.49 million from $327 million (Year-on-Year) in the first month of July-September 2024 Fiscal Year (FY).

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

"As world markets become unstable, the export of leather and leather goods has declined this year. Moreover, the largest markets in the EU are facing an inflation crisis, which has resulted in a drop in the export of leather and leather goods during adverse economic conditions," Syed Nasim Manzur, Managing Director of Apex Footwear Ltd, told The Daily Messenger.

He emphasised the need for government policy support for the potential sector and suggested that subsidies could facilitate growth, similar to the Ready-Made Garment (RMG) industry. Additionally, Nasim called for a climate fund to support 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 can boost the economy," Belal Hossain, the former president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), told The Daily Messenger.

According to LFMEAB, in the past couple of years, approximately 40 percent of the 155 companies have stopped exporting due to quality complaint issues.

Moreover, there is no policy in place for rawhide collection, and the government has yet to provide the required facilities in the newly relocated Savar tannery.

Khondaker Golam Moazzem, Research Director of the Centre for Policy Dialogue (CPD), said that as exports missed the target, it would be a challenge for the sector to address the economic crisis.

Meanwhile, exports of leather and leather goods reached $1,245.18 million in the 2022 FY, up from $941.67 million in the 2021 FY and $1,093 million in 2020.

Industry insiders believe that if export growth continues on its current trajectory, it could reach $1.5 billion by the end of the fiscal year. Unfortunately, the industry could not reach this 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, Netherlands, Spain, Russia, Brazil, Japan, China, the UK, Singapore, Poland, the US, Canada, and Taiwan.

Previously, exports relied on wet blue leather, which is 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 in value to leather goods.