Leather and leather goods exports from Bangladesh in January-April of 2023 fell by 17.55 per cent as demand for leather made luxury items dropped in international market due to inflation.
Exporters also identified lack of environmental compliance as another reason for exports such as footwear for failing to keep export momentum in global market.
According to Export Promotion Bureau (EPB) data, the country's leather and leather goods exports in the four months of 2023 decreased by $78.61 million to $369.2 million compared with those of $447.81 million in the same period of 2022.
Export performance report prepared by Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LGFMEAB) showed export earnings from leather, leather products, and non-leather footwear in January-April of 2023 declined by 16 per cent to $509 million compared with those of $604 million in the same period of 2022.
'After the immediate shock of Covid-19 was over, exports of leathers goods and footwear were getting pace on the global market in 2021-2022, but the situation deteriorated further due to global economic instability caused by Russia-Ukraine war,' LGFMEAB) senior vice-president Mohammed Nazmul Hassan said on Monday.
He said exports of leather products picked in the financial year 2021-22 as western buyers received financial supports from their governments to recover from Covid fallout and they placed increased orders.
After importing increased quantities of leather goods and footwear, global buyers are now facing high inventory load as high inflation caused by Russia-Ukraine war has eaten up the purchasing power of consumers, he said.
Nazmul, also managing director of Leatherex Group, said Bangladesh lather sector failed to attract leading global buyers due to lack of environmental compliance.
He said tanneries in Bangladesh failed to achieve the certification of Leather Working Group due to a nonfunctional central effluent treatment plant at Savar Tannery Village.
Nazmul also said global consumers were shifting their consumption to synthetic footwear from luxury leather items as their purchasing power decreased due to high inflation.
According to EPB data, export earnings from leather and leather goods in the financial year 2021-22 grew by 32.23 per cent to $1.25 billion compared with those of $941.67 million in FY21.
The LGFMEAB data showed total sectoral export performance of January-April of 2023 witnessed a negative trend in every month. Exports of leather, leather products, and non-leather footwear witnessed 13 per cent negative growth in January and February and 17 per cent negative growth in March and April.
The total export of leather products and leather footwear in January-April of 2023 fell by 13 per cent to $330 million while leather footwear exports decreased by 23 per cent to $197 million in the period, the data showed.
The LGFMEAB data also showed total exports of leather, leather products, and non-leather footwear in 2022 increased by 27 per cent to $1.79 billion compared with those of $1.41 billion in 2021.
