LWG rated tannery In Bangladesh

Bangladesh’s leather industry has been struggling to achieve satisfactory growth in its exports due to the ongoing economic fallout of the Russia-Ukraine war. Despite registering a year-on-year growth of 4.12% in earnings from leather footwear exports for the July-February period of 2022-2023, the sector’s growth has been weighed down by the impact of the war since September. Meanwhile, leather exports have slumped by 8.87%, with the overall leather sector suffering greatly during the Covid-19 pandemic in 2020 and 2021. Although leather exports bounced back last year to reach a 10-year high of $1.25 billion, the adverse effects of the ongoing crisis have once again stifled the industry’s growth. Exporters are cautious about injecting fresh funds into production due to the reduced volume of orders, and retailers in Europe are hesitant to take on added burdens. Bangladesh mainly exports low-priced products used by the common people, and with orders in this segment slowing down, the global economy is weakening. The leather industry is urging the government to resolve issues related to bonded warehouse facilities and seeking cooperation from the National Board of Revenue and customs authority to this effect. Despite the export performance differing from company to company, most exporters are registering lower shipments due to the ongoing global economic crisis. Finished leather exports have come down to $77.27 million in the July-January period of 2022-23, while the local currency has lost its value by about 25% against the American greenback in the past year, making imports costlier. The situation is unlikely to improve in 2023 until the global economy fully recovers.

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