Pakistani disappointment at Lineapelle

Many Pakistani tanners participated in the Lineapelle leather fair held in Bologna, Italy, but were very disappointed with the result since few orders were obtained. This year orders booked were 50% less than previous Fair figures. This was stated by S M Naseem, chairman of the Pakistan Tanners Association, who participated in the show. He said that finished leather goods exports had registered a decline of about 25% during the past two months as compared to the previous year. The leather sector as a whole has seen a drop in sales over the past three months. Exports of leather garments from other countries such as China, India and Türkiye, have also been hit, ranging from 20-50% due to lack of demand, recession conditions in EU and USA, changes in fashon and a warm winter. Textile and other materials have also substituted leather as a fashion and due to mild winter season this year. It is reported that exports of leather garments from China, Türkiye and India have declined beteween 20-50% in recent months. Only last month, exports from India declined by 50% since consumers in Europe, USA and Japan do not want to spend and are holding back their purchases to save money for the future. The demand for leather and leather garments have declined due to worldwide recession, particularly due to the weaker economy in the EU and the USA. Tanners in Pakistan are facing big problems due to a lack of orders from abread and due to the lack of orders for leather from manufacturers in the domestic market as well. Prices of finished garment leather have come down by more than 20% and large stocks are accumulating, causing liquididity problems. It is feared that many tanning units may close down due to the lack of orders, thus rendering thousands of workers jobless. The tanners producing leather are worried due to lack of sales, lower prices available in exports and no sales in the domestic market. In addition, the manufacturers in Pakistan are not buying and tanners are also having problems with finance due to delayed payments. The shortfall in exports of leather garments and leather is due to continuous recession in the international market since 9/11, a decline in export prices, decrease in foreign buyers' demand, unfavourable exchange rates against the US dollar, reduction in rebate rate for leather. This is especially true of cow/ buffalo from Rs5.50 to 3.09 and for goat and sheepskins from 3.65% to 1.72%. Tanners are now demanding an increase in duty drawback rates as has been done in the case of garments. Mr Naseem has appealed to the government to take stock of the whole prevalent situation arising out of the continuous declining export trend of leather. It is foreseen that exports of leather would remain on the low side during the coming months and tanners will be in difficult situation. The PTA is approaching the CBR with a demand for an increase duty drawback rates for leather. The duty drawback rates for leather garments have been revised upward recently and tanners are also demanding an increase in the rates for leather by a minimum of 3% on each item. Tanners are demanding that some incentives be provided so that the adverse situation could be avoided.