Tanners see gloomy export future

With hide merchants forced to sell their stocks at low prices, local tanners also see a gloomy future as declines in the sales of leather goods globally dampen the demand for Bangladeshi finished leather from Asian and European manufacturers.
Industry people say in the post-Eid periods they have been getting unusually low enquires from global importers and the prices offered are around 40 per cent less than that in the same period a year ago.
Some tanners see the ongoing depression in leather export sector as similar to what they had experienced in 1993 as artificial leather became fashionable.
Bangladesh Hide and Skins Merchants’ Association general secretary Haji Delawar Hossain said different grades of preserved and salted hides were being traded between Tk 35 and Tk 55 per square feet.
‘The price is less by at least Tk 30 than that in the past year,’ said Delwar, describing that hearing of a deteriorating depression in the finished leather export, merchants were trying to clear stocks immediately.
He claimed that many hide merchants were incurring loss given the existing rates. Even the industry average purchase rates of rawhide in Eid this year were much lower than the previous year’s.
Nearly 100 million square feet of rawhide are available in Bangladesh and sacrificed animals in the Eid-Ul-Azha source at least 40 per cent of the annual supply.
Apex Tannery executive director MA Majed said tanners’ or finished leather exporters’ fates were getting worse than the fate of hide merchants.
‘Most tanners have no enquiries from buyers abroad,’ said Majed, ‘as the recession in Europe and America hit hard the leather goods sales, declining the demand for finished leather drastically.
The chief executive of the country’s largest tannery said that after the Eid he had some enquiries from Italy, with importer offering $2.30 for per square feet of coloured or drum-dyed finished leather against $2.90 a year ago.
The price of natural or vegetable-dyed leather, which Bangladesh is famous for, is being offered at around $2.10 against $2.70 per square feet a year ago, said Majed.
‘I see the market is depressed worse than in 1993,’ said Majed, describing that one-and-a-half-decade ago Bangladeshi exporters faced huge troubles in global markets as sneakers made of artificial leather became all the rage in the western markets.
Majed however said in recent weeks Asian and European manufacturers had preferred vegetable-dyed finished leather to produce jackets, bags and other goods. ‘Economic recession in the West has greatly affected leather goods market. So, Bangladesh is suffering.’
Finished leather earned $284 million for Bangladesh in fiscal 2007-2008 ended in June last, posting a 7.00 per cent year-on-year growth and accounting for 2 per cent of the country’s total export proceeds. But, according to the Export Promotion Bureau, in the July-October of the current fiscal year, leather export earnings saw a 17 per cent year-on-year fall.