Leather exports to China shoot up

The July-April exports of finished and crushed leather have marked a 16 percent uptick, as local makers found a new destination for their products -- China.
Export Promotion Bureau data show exporters earned around $175 million during the period, up from $151.22 million in the same period a year ago.
Leather exports dropped significantly in the last 16 months, mainly because of a fall in demand amid global recession. However, exports went upward from February.
The state-run promotional agency has pointed to the $177.32 million leather exports in fiscal year 2008-09, while the figure was $284 million in FY2007-08.
The leather industry's current overall market size is worth around Tk 3,500 crore a year, industry insiders say.
They said demand for crushed and finished leather in China increased enormously in recent months, enabling the exporters to clear their stocks.
Tipu Sultan, director of Bengal Leather Complex Ltd, a major leather exporting company, said the increasing demand in the world's third largest economy fueled the growth of local leather exports.
"Most of our exports of crushed leather went to China in recent months, as the manufacturers in that country produce leather goods targeting two large fairs -- the on-going six-month long World Expo 2010 in Shanghai and the upcoming Asian Games."
"These two events have turned out to be a boon for our exporters, and they sent a major portion of their produces to China," Sultan added.
He suggested the local manufacturers and exporters develop contacts with Chinese importers to capitalise on the opportunities the large market provides in the long run.
Rezaul Karim Ansari, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, said exporters are pleased with the increase in exports.
However, Ansari thinks this growth might not sustain, as the demand for finished leather in Europe and the US is still declining because a large number of people remain jobless, a consequence of the financial meltdown worldwide.
The sector's trade body leader also pointed to the fact that many exporters opted to produce value added products, such as footwear and bags, as an alternative way in the face of global recession. "Leather exporters lost almost half their running capital because of the economic downturn,” Ansari said.
“Currently a growing demand for raw hide is replacing the demand for finished leather in the international market. And, we do not export rawhide. This has worsened our situation,” he explained.
Leather is an important export item for Bangladesh, as it fetches impressive amount of foreign currency. Some of the most common export leather items are shoes, bags and purses.
Bangladesh has plenty of rawhide, as every year thousands of sacrificial cattle and goats are slaughtered to celebrate Eid-ul-Azha, a religious festival for the Muslims. Local tanners collected more than 29 lakh pieces of cowhide and 45 lakh pieces of goatskin during the last Eid-ul-Azha in November.
Local tanners produce four types of leather -- rawhide, wet blue, crushed and finished leather. The country mainly exports crushed and finished leathers, the demand and sale of which has declined in international market.
Of the total leather exports from Bangladesh, 80 percent is crushed leather and the rest is finished. The products are mainly sent to USA, Italy, Germany, Japan, Korea and China.
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