Pakistan: Leather exports in decline

1 July 2013

Agha Saiddain, chairman of the Pakistan Tanners Association, has expressed concern over the leather industry's stagnant growth at a meeting of industry stakeholders.

Secretary of commerce, Qasim Niaz, also discussed the sector's difficulties, which provides jobs for approximately one million workers across Pakistan. Over the last six fiscal years, the country's exports have fallen by 17.1% from $1,220 billion in 2007- 08 to $1.01 billion in 2012-2013. The sector also has a negative growth rate of -14.09%.

In contrast, the leather industries of Bangladesh, China and India are all performing well, posting positive growth rates of 102%, 47% and 40% respectively for the last six fiscal years.

Pakistan's global market share has also dwindled by 39%, falling from 1.25% in 2007-08 to 0.76% in 2011-12. This is despite the leather sector's overall growth from $98 billion to $137.96 billion over the same period, an increase of 40%. India, Vietnam, Italy and China currently hold global market shares of 3.5%, 6%, 13%, 37.5% respectively.

Second only to Italy in terms of quality and home to an abundance of livestock, it seems surprising that Pakistan's market share has fallen so low.

Exports of wet-blue leather, government withdrawal of subsidised participation in international fairs and the energy crisis are all thought to have contributed to the country's negative growth. The war on terror, rising business costs, civil discontent and poor policy decisions made by the Federal Board of Revenue are also important factors.

Pakistan's government has also withdrawn subsidies for effluent waste water plants allowed under the Strategic Trade Policy Framework (STPF) 2009-12.

Meanwhile, Chinese, Indian, Vietnamese and Italian governments are focusing on bolstering their leather sectors, and using them to support weaker social elements. India alone has channelled 4,000 million rupees, 9,130 million rupees and 12,510 million rupees into its 10th, 11th and 12th Indian leather plans respectively.

Immediate steps must be taken if Pakistan's declining leather exports are to be halted. The 2012-15 STPF has taken some positive steps, forming the Leather Export Promotion Council during the last year independent of government initiatives.



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