Home / Knowledge / News / Buyers move to China affecting Pakistani leather exports
Buyers move to China affecting Pakistani leather exports
07
May '09
Pakistan is loosing its leather market because of China, as that country has a greater advantage in the duty drawback system, said Fawad Ijaz Khan, Chairman of Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA).

The duty drawback system refers to a duty that a manufacturer pays when he imports raw materials meant for production of export goods, which is then refunded at the shipment stage through a formula designed by the local government.

To emphasize the impact of duty drawback rate on the local exports, Mr. Khan pointed out that during the period July-March 2009; exports stood at $307 million, which were $413 million during the same period last year. Khan added that in the year preceding the previous fiscal, Pakistan witnessed record high exports at $528 million.

This reveals a decline of 26 percent in leather garments exports due to buyer's shift from Pakistan to China. Due to the global recession there was a 10-15 percent decline in the exports and rest was lost to China due to the introduction of duty drawback system there in January, informed Mr. Khan.

The leather garments exporters in China receive 13-15 percent duty drawback from the government while the Pakistani government provides a mere 2.4 percent of duty drawback to its leather exporters. This creates a competitive advantage for Chinese exporters.

With regards to the high drawback on duty paid by the Chinese government to its leather goods exporters, Mr. Khan said that they are trying to study how Chinese government can provide this much duty drawback rate and consultant has been preparing detailed worksheets of the Chinese leather garments industry, he informed.

According to Khan, in Pakistan the duty drawback rate should be at least 4.64 percent, about which the Federal Board of Revenue has been repeatedly communicated but it is still stuck with 2.4 percent.

As compared to last year, the overall leather industry exports of Pakistan have witnessed a decrease of 19 percent and the decline needs to be arrested before it affects the industry badly, said Mr. Khan. Further he mentioned that due to the ineffective law and order in the country, the industry has also lost its customers.

As the prices of leather products of the country are non-compatible with those of China, the Pakistan leather products have continued to stand in the in the global market, only because of its good quality, said Khan.

Pakistan has 1.25 percent market share in the global leather products market of $100 billion by exporting worth $1.2 billion. In the worldwide leather garments industry turnover of $6 billion, Pakistan has a larger share of exports at $528 million.

After the first and second position occupied respectively by China and Turkey, Pakistan enjoys third position in the world for its leather products. The Ministry of Industries has funded a study to help the Pakistan leather garment exports to reach $5 billion by the year 2018.


Must ReadView All

Arvind Limited executive directors Punit Lalbhai (left) and Kulin Lalbhai explaining the project to Gujarat chief minister Vijay Rupani. Courtesy: Arvind Ltd

Apparel/Garments | On 18th Oct 2017

Arvind to set up mega apparel facility in Gujarat

Arvind Limited, one of India’s largest textile to retail...

Clash over monetary payment by UK at Brexit talks

Textiles | On 18th Oct 2017

Clash over monetary payment by UK at Brexit talks

The European Union (EU) and the United Kingdom (UK) are clashing over ...

Cotton stocks accumulating everywhere outside of China

Textiles | On 18th Oct 2017

Cotton stocks accumulating everywhere outside of China

Global cotton stocks outside of China are expected to rise by nearly...

Interviews View All

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Poojaa Kumar Deepak
Zeven

Zeven's performance sports apparel is designed for the Indian body type,...

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
77.3%
No
13.6%
Skip
9.1%

Total Votes: 66

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
60.6%
No
28.8%
Skip
10.6%

Total Votes: 66

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
84.8%
No
10.6%
Skip
4.5%

Total Votes: 66

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
74.2%
No
12.1%
Skip
13.6%

Total Votes: 66


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search