Leather exporters brace for political fallout
Export orders for leather and leather goods dropped significantly in the last few months due to the ongoing political unrest, industry people said.
As things work in the leather industry, buyers usually place orders after physically visiting the factories due to the sophistication in manufacturing processes.
But, thanks to the political unrest buyers are vehemently avoiding visiting Bangladesh of late, said Mohammed Nazmul Hassan Sohail, managing director of Leatherex Footwear Industry Ltd, a leading leather goods exporter.
“We are very concerned about new orders -- where are they going to come from if the buyers do not arrive?”
The company has experienced a 15-20 percent drop in new orders in the last two months.
“We are passing through a very difficult time,” said Mohammad Abu Taher, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association, adding that foreign buyers have almost stopped providing new orders due to the political turbulence.
The value of the lost leather orders over the past two months could be around $150 million, according to Shaheen Ahmed, chairman of Bangladesh Tanners Association.
Md Saiful Islam, senior vice-president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, however, said the full impact of the political unrest would manifest in the first quarter's export data.
Also the managing director of Picard Bangladesh, Islam expects export orders to fall by a half if the present unfriendly business environment continue for another two months.
If the political deadlock is not broken through immediately, manufacturers said they will not be able to reach the export target of $1.21 billion set by the government for the fiscal year.
Between July and November, exports of leather, leather products and footwear rose by nearly 40 percent year-on-year to $510 million. Exporters assert those earnings came from orders placed before the political unrest began.
Bangladesh exports leather products mainly to Italy, New Zealand, Poland, the UK, Belgium, France, Germany, the US, Canada and Spain.
Also, Japan, India, Nepal, Australia and some other countries are emerging as potential importers of Bangladeshi leather goods.
The industry earned $980.67 million by exporting leather, leather products and footwear in the last fiscal year, up from $765.03 million recorded in fiscal 2011-12, according to EPB.