Damp China market sends leather export to negative zone

Staff Correspondent | Published: 23:33, Feb 11,2018

 
 

Country’s earnings from export of leather and leather products plunged in the July-January period of the current financial year (2017-18) due to a slow growth in China and Europe markets.
Export earnings from readymade garments, however, maintained a moderate growth in the EU in the period, according to the Export Promotion Bureau data.
Leather and leather products in the seven months of FY18 fetched $709.51 million in export earnings, down 4.61 per cent from $743.77 million in the same period of the FY17.
Earnings from crushed leather export fell by 31.49 per cent to $112.84 million while leather product’ export decreased by 1.86 per cent to $238.69 million in the period.
Leather and leather products export to China in the seven months of FY18 fell by 67.80 per cent to $51.55 million from $160.10 million in the same period of FY17.
Exporters said that export earnings from the sector in the seven months of the current fiscal year posted a negative growth due to a slowdown in demand for the products in China and Europe markets.
They said that the country was losing its competitiveness in the global market as the exporters had been failing to maintain lead-time due to inefficiency of the Chittagong seaport and lack of necessary policy support.
‘Following the relocation of tanneries, leather and leather goods exporters have been facing a severe financing problem as the entrepreneurs are yet to get the registration for land from the government and banks are not providing loans,’ M Abu Taher, former president of the Bangladesh Finished Leather, Leathergoods & Footwear Exporters Association, told New Age.
He said that they had been facing both the supply-side and demand-side constrains for last few months as production of lather and leather goods decreased due to lack of fund while demands for the products fell in the major markets like China and the EU.
Taher, also the chairman of Fortuna Leather Craft Ltd, said that along with Vietnam, neighbouring competing countries like India, Myanmar and Pakistan were eating up the market share of Bangladesh in China and the EU.
EPB data showed that earnings from leather product export to the United Kingdom in July-January of FY18 decreased by 53.64 per cent to $0.54 million from $1.16 million in the same period of FY17.
RMG export to the UK, the third largest export destination for Bangladesh, in the period grew by 18.44 per cent to $2.18 billion from $1.84 billion in the same period of last fiscal year.
Export earnings from the United States and Germany, the topmost and second largest export destinations respectively, also registered a poor growth in the July -January period of FY18.
In the period, export earnings from the US grew by 1.37 per cent to $3.44 billion from $3.39 billion in the same period of FY17.
Leather product export to the market, however, grew by 68.08 per cent to $32.71 million from $19.46 million, the data showed.
Export earnings from Germany in July-January of FY18 grew by 1.75 per cent to $3.41 billion from $3.35 billion in the same period of last fiscal year.
Leather product export to the market in the period dropped by 5.91 per cent to $9.99 million from $10.62 million.
Leather product export to France in the seven months of FY18 fell by 77.03 per cent to $0.18 million from $0.82 million in the same period of FY17.
Country’s export earnings from France stood at $1.15 billion with a 3.51-per cent growth in the period.
Country’s export earnings from Italy in the July-January period of FY18 grew by 11.45 per cent to $945.72 million while earnings from leather products fell by 31.94 per cent to $2.59 million from $3.81 million.
‘Economic slowdown, depreciation of the euro against the dollar and inefficiency of the Chittagong port are the major causes of the negative growth in leather product export earnings,’ Mohammed Nazmul Hassan, managing director of Leatherex Footwear Industries Ltd, told New Age on Saturday.
He said that due to the lengthy lead time, Bangladesh was losing its European market while the countries of Eastern Europe like Albania and Tunisia were gaining there.
Nazmul also said that China had already shifted a good number of orders for leather products to Vietnam and Myanmar as Bangladesh lost its competitive edge.
Country’s export earnings from Australia in the seven months grew by 8.80 per cent to $415.54 million from $381.92 million in the same period of last fiscal year.
Leather product export to Australia fell by 26.71 per cent to $1.74 million from $2.38 million.
Country’s export earnings from Canada in the July-January period increased to $640.23 million from $593.17 million in the same period of last fiscal year.
Earnings from leather products increased to $2.17 million from $1.74 million.
Country’s export earnings from China in the July-January period of FY18 fell by 27.20 per cent to $407.91 million from $560.39 million in the same period of FY17.
Export earnings from India grew by 12.32 per cent to $447.23 million while earnings from RMG export stood at $137.28 million with a 75.74-per cent growth, the EPB data showed.

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