Tanners say government’s new decision will not break leather syndicates or solve problems in the industry
Export of wet-blue leather might put an end to the years-long anarchy in the leather sector and also break the syndicates, say Commerce Ministry officials.
Government officials said that the approval of the export of 10 million square feet of wet-blue leather will increase export earnings by at least $7-8 million this year as the current price of wet-blue leather is around 70-80 cents per square foot.
Sha Md Abu Raihan Alberuni, member of the Bangladesh Trade and Tariff Commission, said that this move will boost exports of wet-blue leather.
“The purpose of this temporary decision, which has been taken for only one year, is to try to break the evil syndicates in the leather sector. If it adversely affects the domestic industries, it will be annulled and the instructions say so,” he added.
Tannery entrepreneurs said that the decision will not improve the current situation, rather, it will threaten the domestic leather industry as they rely on Eid-ul-Azha to collect wet-blue leather for the entire year.
Shawkat Ullah, general secretary of Bangladesh Tanners Association (BTA), told Dhaka Tribune that they are not entirely happy with this decision because it will have little effect on the existing problems.
“The government may have taken this decision to overcome the current situation, but we have demanded not to prolong the decision. Eid-centric wet-blue leather supplies about 50% of the country's footwear industry. If the export trend increases, the same leather will have to be imported again,” he added.
Earlier, the government allowed five domestic companies to export wet-blue leather for one year to create demand for rawhide in the domestic market during Eid-ul-Azha.
They allowed local tanneries Messrs Quader Leather Complex, Kalam Brothers, ASK Investment, Leather Industries of Bangladesh (Unit-2), and Amin Tannery Limited, according to an official of the Ministry of Commerce.
According to the official, the ministry has given a number of conditions to the companies in the permission letter for export of wet-blue leather.
The five tanneries will have to follow the Export Policy 2018-21 when going for the export, said the ministry's permission letter.
Initially, the five have been allowed to export 10 million square feet of wet-blue leather, meaning each tannery has been allocated a quota of 2 million square feet.
The tanneries will have to submit necessary documents to government offices and to renew their permissions of shipments if the quota is reached and if they wish to export more, said the letter.
The permission for the initial amount will be valid until June 30 of the next year. Moreover, the permission can be annulled at any time, said the letter.
The tanneries have to export to the permitted countries only, said the letter of the ministry.
According to industry insiders, wet-blue leather is the leather that is obtained after processing raw leather and removing fur from the animal's body. It refers to chrome-tanned leather, which is neither dried, dyed nor finished.
It has to undertake another processing to be converted to usable hides for manufacturing goods such as shoes and bags or for export, they said.
According to the tanners, such leather was exported from Bangladesh until 1990 when the government banned it.
However, leather and leather goods posted an 18.06% growth earning $941.67 million in FY21, which was $797.6 million in FY20.