The leather and leather goods sector of Bangladesh have had to lose its position of the second highest export earner for the country recently — readymade garment industry is the highest export earner — after its earnings in FY20 marked a decline of 21.79 per cent to clock US $ 798 million from sale of leather and leather products.
The sector lost its coveted position to jute and jute products, which took over the leather sector as the second highest export earner with earnings of US $ 882.25 million from export of jute and jute products in FY20.
As of FY2019, after the apparel sector – which holds the top position – leather and leather goods sector was the second highest export earner for the country.
According to data made available by the country’s Export Promotion Bureau (EPB), earnings from leather and leather products in FY19 were US $ 1.01 billion.
Further, the earnings from export of leather footwear fell by 21.24 per cent to US $ 478.75 million compared to what was US $ 608 million in FY19 while earnings from export of processed leather marked a massive decline of 40.28 per cent to US $ 98.31 million.
Earnings from export of processed leather were US $ 164.62 million in the corresponding period a year ago.
Meanwhile, even as the leather and leather goods continue to struggle amidst falling demand for leather and leather products amongst global buyers, the Bangladesh Bank (BB) recently came forward to help the leather traders by allowing them to reschedule their existing loans to 6 years and term loans to maximum 8 years, with one year’s grace period.
The central bank has given a directive to this end to all commercial banks which would now allow leather traders to reschedule loans that they have defaulted on after paying a down payment of 2 per cent.