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%-60% higher prices in Europe and US by achieving environmental standards, they told UNB this week.
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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 occurs 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, ie $1 per square foot of leather. But if we sell to EU and US buyers, we would get 50%-60% higher prices,” he added.
Ahmed said considering the present situation the Ministry of Industries 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 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 the 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 Tk70-Tk75 per square foot in Dhaka. The price outside Dhaka was Tk60-Tk65 for sacrificial animals.
But in the end, on the Eid-ul-Azha, salt-free rawhide was sold at Tk90-Tk100 per square foot in Lalbagh Posta of Old Dhaka.
In the last eight years the price of rawhide has decreased each year. People put them 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 Tk47 and Tk52 within the capital city, while outside the city it would range from Tk40 to Tk44 for this year. Similarly, male goat's skin, according to that standard, was to be sold between Tk18 and Tk20 per square foot and that of nanny goat's between Tk12 and Tk14.
But in reality the rawhide of sacrificial cowhide was at Tk200 to Tk350 while goat leather was sold at Tk10 only in Dhaka, said Mufti Mustafijur Rahman, vice principal of Jamia Islamia, Eskaton.
Earlier, 50% of annual expenditure of his madrasa was maintained by selling the leather during Eid-ul-Azha, which has decreased to 20% 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% 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 favourable environment for raising and nurturing animals, Bangladesh has 2% of the total livestock population in the world. Bangladesh’s leather is internationally popular for its high-quality fine grain, uniform fibre structure, smooth feel, and natural texture, experts say.
