Bangladesh needs to fulfil compliance issues to hit int’l leather markets

A lack of compliance is preventing the leather sector in Bangladesh from tapping its potential and expanding its footprint in the international market despite the availability of raw materials locally. As a result, exporters are getting 30 per cent to 40 per cent lower prices for their products in the global market compared to competitors. A fair price can’t be ensured in the local markets as well.
Leather, leather products, and leather footwear exports have increased. However, both the government and researchers believe that the export earnings could go up to $12 billion by 2030. The leather sector is not doing well due to non-compliance. Experts said Bangladesh is getting around 30 to 40 per cent lower prices for export-oriented products. The problems in the leather sector have already been identified. Now, strong initiatives are needed to address them.

The global supply chain of leather goods has almost broken due to the Covid-19 pandemic and the ongoing Russia-Ukraine war. There is a scope to raise the country’s share in the global leather and footwear market, but it is not possible due to non-compliance. The assessment is based on a worker survey involving 120 labourers and an employer survey involving 20 tanneries located at the Savar Tannery Industrial Estate.

Insiders said the standard of the CETP has not reached the level required for the LWG certification. Further modification and modernisation will be required. Now, in the absence of the accreditation, local exporters have to export leather at rates about 40 per cent lower than the going rates in the international markets to China, which accounts for about 60 per cent of the tanned leather produced in Bangladesh.

Similarly, finished goods exporters have to import rawhides from LWG-certified factories in other countries to ship products to developed markets. Since independence, the export of rawhides has declined by 79 per cent while the export of finished leather has gone up by 80 per cent. This indicates that local entrepreneurs are not being able to use locally available rawhides mostly because of the non-implementation of policies. Bangladesh could earn $10 billion to $12 billion per year from the leather and leather goods sector if it is nurtured and monitored properly. Bangladesh needs to focus on fulfilling compliance issues to untapped the high potential of leather and leather goods.