This financial year has been notable for many things and the prominent one being the falling export of leather and leather products of Bangladesh. In comparison to the previous fiscal year, there has been a notable fall during the July-January period.
A slight positive growth rate of 7.35% was noted only for the leather footwear that led to earnings of $384.30 million. While during the same period in 2017-18, the same figure was $357.98 million.
The growth prospects of the sector are said to be hurt due to the lack of product variety and slackness in vigil on the part of the tannery estate. As a result, the environment at Savar has deteriorated. The Exports Promotion Bureau has reported that a negative growth rate of 11.7% has been registered by the leather sector here. This has led to earnings of $626.42 million in the current financial year 2018-19 (July-January). During the same period of previous financial year, this figure was around $709.51 million.
The leather prices went up in the world market in 2013 and since that time, artificial leather products have been into production by renowned leather manufacturers so that the global demand of leather can be addressed.
Due to the consistent negative growth for a long period of time, there has been a loss in foreign and local investment in the region. Another major reason is the signaling of an imposition of 25% tariff on a number of Chinese products by the US government. This list of products which entered the US market and faced imposition of tariff also included leather. Bangladesh native leather industry has thus been impacted badly as China stopped taking raw hide from it. Earlier raw hide was being exported to China in surplus amount which was further processed into raw materials by China.
Savar has witnessed a shifting of 155 factories nearby, out of which 125 factories are running and 25 tanneries have fully started their operations but are into processing of crust leather only. The sector is struggling hard to achieve global standards in terms of compliance. It has also not been getting the advantage of the Central Effluent Treatment Plant (CETP).
Image Source: https://i2.wp.com