Leather exports fail to achieve target in FY23

Staff Reporter :
The export growth of leather and leather products witnessed a very narrow growth only by 0.42 per cent year -on -year in the first eleven months of the current financial year of 2022-23.

This export of oriented sector which also considered country’s third engine for growth has failed to achieve its export by a significant margin of 13.95 per cent from July to May in FY23, as per May summary sheet published by Export Permission Bureau (EPB).

Bangladesh shipped out leather and leather goods worth $1.120 billion in first eleven months of the current fiscal year while it was $1.115 billion in the same period of the previous financial year.

Industry experts said that along with external factors like post-Covid economic turmoil, the Russia-Ukraine war, global demand downfall the internal weaknesses like poor infrastructure, lack of product diversity and innovation, fluctuating raw hide supply, poor processing, lack of slaughterhouse, difficulties in accessing financing, and poor trade diplomacy are also posing barrier to the sector’s growth.

The local currency has lost its value by about 25 per cent against the American greenback in the past one year, making imports costlier, they added.

Subsectors like leather footwear, leather products, and leather alarming failed to achieve its target in May whereas only leather products witnesses a positive year-on-year growth in the last month by 19.43 percent.

According to data from Leather goods and Foot ware Manufactures & Exporters Association of Bangladesh (LFMEAB), From July to April in FY23 total sectoral (leather, leather products, and non-leatherfootwear)export growth is just less than 1 per cent.

The export trend ofApril’23 over March’23 has shown a negative growth in almost all subsectors except Leather.

Mohiuddin Ahmed Mahin, President of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, blamed three factors behind the tinny growth of leather and leather products sectors.

Buyers do not feel interested in purchasing products from Bangladesh given the country’s non-compliance with the guidelines of the Leather Working Group, a global multi-stakeholder community committed to building a sustainable future with responsible leather, he said.

International prices are less compared to what they were in the preceding fiscal year, said Mohiuddin Ahmed.

The Ukraine war has disrupted supply chains while also giving rise to other economic concerns, he added.