Trade Chronicle Sep - Oct - 2020 issue

TRADE CHRONICLE
Chairman, Pakistan Tanners Association
(PTA), Anjum Zafar has urged Prime
Minister Imran Khan and Advisor to PM
on Commerce & Textile Abdul Razzak
Dawood for early inclusion of dyed/
finished leather in the new DLTL scheme
with retrospective from July 2018 to
enable/equip finished leather exporters/
PTA’s members to compete Internationally
and contribute to earn additional foreign
exchange for the country.
b e s t
after
Italian
Leathers
where the value addition is around 200%
which is highest in comparison with rest
of commodities/products of the leather
Industry and our finished leathers are
sold to worlds major brands for shoes,
bags, belts and leather products etc,
PTA urges government to restore DLTL scheme
“Finished Leather” was included from the
beginning of the scheme for the year 2017-
18 for some specific period effective from
Feb’2017 to June 2018, but suddenly the
finished leather was unilaterally excluded
for inclusion in the new DLTL scheme
effective from July 2018 till date.
It is also shared that most of tanneries
have already closed down their
operation in Pakistan and rest are at
verge of closure, if the unrest situation /
discriminatory attitude with the finished
leather industry is continued.
He also shared one of the main reason
for the continuous declining trend of
Finished Leather as discontinuation of
“Finished Leather” for the DLTL Scheme,
from July’2018 which was previously
being given and since then the declining
trend of the export of finished leather has
been broaden gradually year to year and
reached now at (-) 40%, which is very
alarming for the industry and exports.
Anjum Zafar also clarified that the Finished
Leather is much value added product of
Leather Sector of Pakistan and is second
but unfortunately still deprived to avail
the DLTL incentive for this vital product
of the industry and rest of commodities
are availing the DLTL scheme, which is
ultimately leading to the cause of inability/
in-competitive of our member exporters in
International market.
He also informed to the media that the
Anjum Zafar also shared the ground
reality/facts that the overall leather Sector
exports for the period of Aug/Sept’2020
as compared to corresponding period is in
negative (-) 4%. However comparing with
the potential of this industry, the over all
leather sector was exporting 1.25 billion
USD at peak in year (2014-15) which has
continued to drop to overall about 750
million USD only for the year (2019-2020)
which is dropped of about 40% in total
leather sector, which is very alarming for
our country’s much needed exports and
also for this industry.
Bangladesh leather exports
shrink in July-Sept 20 period
The Bangladesh’s export earnings from
leather and leather goods contracted
during the first quarter of current fiscal
year.
Bangladesh fetched US$ 225.15 million
from leather and leather goods exports
during the July-September period of FY
2020-21 posted a 19.49 per cent negative
growth over the corresponding period of
the last fiscal.
Shipment of the sector was $1.23 billion
in FY2016-17 and since then it has
continued falling and stood at $797.6
million in FY 2019-20, according to official
data of the Export Promotion Bureau
(EPB).
Exporters attributed the fall in export
earnings to the failure in using local raw
materials due to compliance issues,
sluggish global demand and a shift in
synthetic items. The pandemic is the
latest blow to the industry.
As Covid-19 has re-emerged in Europe
and the continent, Bangladesh’s biggest
leather export market, the leather goods
and footwear sector will suffer from
huge losses, it added.
Furthermore, small entrepreneurs in
the sector are struggling to survive.
Although it is difficult to project the losses,
this sector will suffer by the end of the
second quarter of 2020, it said, citing the
industry projections that the sector has
suffered losses of over $330 million owing
to order cancellations.
Saiful Islam, President of the Leatherwoods
and Footwear Manufacturers and
Exporters Association of Bangladesh
(LFMEAB) told media that one of the
main reasons behind the negative growth
is that local manufacturers could not use
local raw materials due to compliance
issues as they are not environmentfriendly.
Moreover, people’s income across the
world has decreased resulting in the
decline in retail sales, he said, adding
there has also been a shift to synthetic
items.
He noted though factories are in
operation, only 50 to 60 per cent capacity
are being used.
The LFMEAB leader, however, sees the
silver lining of opportunity, saying the
US investigation into Vietnam’s currency
devaluation might decrease the single
country dependence.
If the covid-19 second wave does not hit
much and the central effluent treatment
plant becomes effective, he said, the
export of leather and leather goods would
be better in the second quarter than the
first one.
Though the local leather and footwear
industry is going through tough times
with the drop in export earnings, industry
insiders said they are receiving queries
from investors who are interested in
investing in the country.
At a recent virtual event, exporters said
businesses from Vietnam, Japan and
Taiwan are keen to invest in Bangladesh
mainly to take its trade benefits on
exports, low production costs and cheap
source of raw materials and workforce.
(Local media)
TRADE CHRONICLE - Sep - Oct - 2020 - Page # 17