Exporters attributed the fall to the international buyers’ reluctance to source from non-compliant tanneries.
Industry people said the country has a large stock of processed leather at the warehouses while the Eid-ul-Azha, the Muslims’ occasion of sacrificing animals, is approaching.
About 70% of rawhide are collected during the Eid-ul-Azha in the Muslim majority Bangladesh.
“Non-compliance with environmental and other issues in the Bangladeshi tanneries are to blame for downward trend in the processed leather exports,” said an exporter.
He said: “Buyers are not willing to collect processed leather from Bangladeshi tanneries as the tanneries do not properly follow environmental and health issues.”
According to the Export Promotion Bureau data, the country earned $278m exporting processed leather in the fiscal year 2015-16. But the earning in the previous fiscal was about $400m.
However, the total earnings from the leather and leather goods, the second highest contributor to national exports after garment industry has posted a 2.7% rise to earn $1.16bn from $1.13bn a year ago.
Of the figure, an amount of $278m came from processed leather export, $388m from leather goods and $495m from footwear export.
“We have stocks of leather from last year’s collection as the buyers didn’t buy them because of concerns with environment and health hazards,” M. Abu Taher former chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA) told the Dhaka Tribune.
The international buyers maintain a policy in sourcing that the factories will be compliant with environmental matters, Taher said.
“However, we will hopefully come out of the current dull situation soon as we are very close to relocate all tanneries to the Savar Industrial Zone. The initiative of relocation is to keep the environment safe.”
On the other hand, industry people said, the recession in the export destination countries is another reason behind the slow earnings in leather exports.
The Ministry of Industry allocated plots to 155 tannery owners through the Bangladesh Small and Cottage Industries Corporation (BSCIC) in the Leather Industrial Park, which has been established on 200 acres of land in Savar. This estate is aimed at making the sector environment-friendly.