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Leather exports likely to dip in current fiscal

23
Dec '08

Experts from the leather industry estimate that current fiscal will witness a drop of nearly 25 percent in its export figures of leather products. This situation can be attributed to low demand in the international market.

Now for leather being one of the most important export items of the country, earning huge amount of foreign currency, present situation has become a matter of concern for the industry.

There is a huge stock of finished leather lying unsold, on the back of declining international market prices. Each year, Bangladesh accumulates plenty of rawhide, after the celebration of the Muslim religious festival of Eid-ul-Azha. This year, more than 2.9 million cowhide and 4.5 million goat skin has been collected.

What makes the scenario so fearful is that the prices of finished leather goods are likely to slip up to 40 percent this financial year and such a drop will directly hit the 195 tanneries in the country.

In this regard, Mr Alhaj Rezaul Karim Ansari, Chairman, Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, (BFLLFEA) told Fibre2fashion.com, “Owing to the continued global financial crisis, demand for finished leather and leather goods has dropped in international markets in the last three months. This will ultimately affect our leather exports.”

Available statistics show that price of per square foot of finished leather which was $4.70 per square foot in last fiscal, has gone down to $4.20 in the past two months because of the global financial crisis.

The overall market size of the leather industry is nearly Tk35000 million a year, with export figures standing at $284 million in 2007-08.

”Further drop in leather exports is likely this year, influenced by slumping demand in international markets. Our prediction is that global economic crisis will reduce consumption and eventually prices,” stressed Mr Ansari.

While discussing what the Bangladeshi Government should do to improve the present condition, BFLLFEA Chairman stated, “At present there is no provision of cash incentives on exports of leather. We requested our Governments to provide cash incentives on exports of leather to safeguard the industry along with the request to reduce interest of bank loan.”

“However we have to look far and wide for potential buyers who will offer high prices for our leather. This has created insecurity over reaching export targets set for the year,” said Mr Ansari on a concluding note.

Fibre2fashion News Desk - India

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