Bangladesh loses $5-10b in leather export

Environmental issues are holding back the export of Bangladesh’s leather to Europe and the US and a potential earning of up to $10 billion a year, according to traders and exporters.

Industries are selling raw (wet blue) leather at $1 per square foot to some specific countries which is possible to sell at 50 to 60 per cent higher price in Europe and US by achieving environmental standards, they told UNB this week.

In 2020, the global market for leather goods was worth $394 billion, Bangladesh can earn $ 5 to 10 billion annually from leather goods export, if environmental issues are solved, they said.

“Elite brands in the European Union (EU) and the United States (US) sell leather shoes for $150 to $1,000 per pair. But they do not sell products produced through polluting the environment,” said Mohiuddin Ahmed, Chairman, Bangladesh Finished Leather, Leathergoods and Footwear Exporters Association (BFLLFEA).

“Pollution occurrs in the leather industrial city of Savar (Hemayetpur). This is why the EU and US don’t buy our leather. We are forced to sell to the Chinese at a low price i.e. $1 per square foot of leather. But if we sell to EU and US buyers, we would get a 50-60 per cent higher price,” he added.

Ahmed said considering the present situation the Ministry of Industry should allow at least 20 tanneries to build their own waste Effluent Treatment Plants (ETPs) which is suitable for the certification of the international organization Leather Working Group (LWG).

It helps to reduce the pressure on the Central Effluent Treatment Plant (CETP) and at the same time the stagnation of the leather sector will be resolved, he suggested. “Leather sector is not a cottage industry, it’s a heavy industry. Bangladesh Small and Cottage Industries Corporation (BSCIC) has no capacity to handle such a big industry, so it should shift from BSCIC to save the sector,” said Chairman of BFLLFEA.

In 2014, BFLLFEA, Bangladesh Tanners Association (BTA) and Bangladesh Hide and Skin Merchants’ Association (BHSMA) in a meeting with the commerce ministry set the price of cow skin at Tk 70-75 per square foot in Dhaka. The price outside Dhaka was Tk60-65 for sacrificial animals. But in the end, on the Eid-ul-Azha, salt-free rawhide was sold at Tk 90-100 per square foot in Lalbagh Posta in Old Dhaka.

In the last eight years the price of rawhide has decreased each year. People put in the ground due to lower price of leather, which slightly improved by a move of price fixing for salted rawhide by the commerce ministry.

The price of per square foot of salted cowhide was set between Tk 47 and Tk 52 within the capital city, while outside the city it would range from Tk 40 to Tk 44 for this year. Similarly, male goat’s skin, according to that standard, was to be sold between Tk 18 and Tk 20 per square foot and that of nanny goat’s between Tk 12 and Tk 14.

But in reality the rawhide of sacrificial cowhide was at Tk 200 to Tk 350 while goat’s leather was sold at Tk10 only in Dhaka, said Mufti Mustafijur Rahman, vice-principal of Jamia Islamia, Eskaton.

Earlier, 50 per cent of annual expenditure of his madrasha was maintained by selling the leather during Eid-ul-Azha, which has decreased to 20 per cent in the last eight years, he said.

Dr. Mohammad Abu Eusuf, professor of development studies, University of Dhaka, told UNB that because of lack of policy and proper government initiatives, Bangladesh is missing a big volume of leather goods export opportunity.

If the leather sector is reformed with policy and modern technology, removing pollution from the leather industry, it can earn $5 to 10 billion annually, he said.

Leather is one of the oldest industries in Bangladesh. Exporting 10 per cent of the global demand for leather, Bangladesh’s leather industry has become the country’s second-largest source of foreign exchange after RMG.

Having a favorable environment for raising and nurturing animals, Bangladesh has 2 per cent of the total livestock population in the world. Bangladesh’s Leather is internationally popular for its high-quality fine grain leather, uniform fiber structure, smooth feel, and natural texture, experts say.