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| News and Updates |
| Leather export declines 31.43 percent in 3 years - Aug 27, 2010 16:26:08 |
KARACHI: The export of leather and leather products during the years 2007-08 to 2009-10 declined by 31.43 percent, Pakistan Tanners Association said Thursday. The decline in exports during the 2008–09 was 19.26 percent compared with 2007–08 and further exports declined by 15.07 percent during the year 2009–10, chairman BMG PTA, Agha Saiddain said.
The reasons for this decline including cost of doing business have gone up in Pakistan in last 3 years. Only in wages and utilities the cost per square foot of leather has increased by 50–60 percent. Similarly, cost of imported chemicals has gone up because suppliers from Europe increased the prices by about 30–40 percent in the last 3 years and in Pakistan exchange rate, interest rate and other charges have also increased. Our chemical cost has increased by about 33 to 45 percent in these years. On the other hand per unit export price has gone down for various products
All exchange rate benefit to the exporters was drained out through price reduction in leather, 14.92 percent, leather garments 15.13 percent and leather gloves 21.59 percent and all profitability of industry was eaten up by increased inputs.
Damage to livestock in war-hit areas of Swat and North Wazirstan also inflicted heavy losses on supply of leather and skin. After recent devastating floods, there is going to be an acute shortage of livestock in Pakistan. Due to “No Travel Advice” issued by almost all the countries our marketing cost has gone up and most of the airlines and shipping lines have closed their operations in Pakistan. The operational shipping lines and airlines are charging very high for both imported shipments and for export cargo. The insurance cost has also gone up.
The foreign counterparts have left the country and many international buyers like Gap, Nike, and Walmart have closed their offices in Pakistan. The government allowed export of live animals on permit basis. The decision was based on wrong statistics created in the various government offices showing surplus in livestock of the country, Agha added.
He said, “The government without any discussion with stakeholders has taken wrong decisions, which further added insult to the injury. The NEQS were fixed without knowing the ground reality and without considering its impacts on our industry”. The industries with individual environmental treatment plants are unable to meet the NEQS and customers stopped buying saying that they cannot buy from the supplier who is not following laws of the land.
The government set up combined treatment plants at various places and these are also unable to meet NEQS. The solution was simple to revise the unrealistic NEQS but the government is not serious. PTA has been crying for the last two years that the leather industry may be provided level playing field with India, China, and Bangladesh.
There is a dire need to take immediate steps to save this important sector, which is second largest manufacturing sector as for as foreign exchange earning is concerned. Ban on export of live animals at least 50-60 percent export duty may be imposed on export of raw skins, picked skins and wet blue leather. NEQS may be relaxed and brought the level, which are practical and possible. |
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