Trade Chronicle May - June 2020

TRADE CHRONICLE
Honour contracts' pleads CLE as
India loses $1bn in leather orders
Chinese co to set up $1.02m leather
industry at Chattogram EPZ
India's leather sector has lost an
estimated $1 billion in orders for export
due to the global fallout from the
cornonavirus, according to the country's
Council for Leather Exports.
Its Chairman, Aqeel Ahmed Panaruna,
stressed that buyers need to honour
contracts that have been agreed so that
raw materials and chemical companies –
and employees – can be paid. He said:
“We understand the closure of retail
stores and consequent downsizing of
orders by buyers. However, the buyers
need to honour the business contracts
which have been agreed.
"Future business contracts/negotiations
can always be firmed up on mutually
acceptable terms as cancellation of
contracts will cause a massive loss to our
industry and affect the livelihoods of
thousands of workers who belong to
economically weaker sections.”
This sector in India employs 4.42 million
people and more than 90% of businesses
are in the Micro Small and Medium
Enterprises segment. Mr Srinivasan of
Prime International, Chennai added: “The
tanneries today have stocks of raw
materials both imported and domestic
and also have lot of chemical inventories
and this lockdown with a 50%
cancellation of orders today will put every
tannery in deep trouble.”
The lockdown also means tanneries and
production units are all closed and export
shipments lying ready are stuck. Indian
tanners called on buyers to act
responsibly.
Mr Panaruna added: “The abrupt
cancellation of export orders by overseas
buyers is causing financial catastrophe to
our exporters and rendering their
employees jobless and hence, buyers
need to honour the contracts.
“The Indian leather, leather products and
f o o t w e a r i n d u s t r y ( i n c l u d i n g
components) takes this opportunity to reaffirm
its commitment for further
enhancement of trade ties with all buyers
in the long term and wishes for a speedy
return to normalcy in all countries.”
The Bangladesh Export Processing
Zones Authority (BEPZA) and Chinese
company M/s Unicorn Leather Goods
Factory Limited signed an agreement
under which the company will establish a
leather and artificial leather products
manufacturing industry at the
Chattogram Export Processing Zone,
said press release.
B E P Z A m e m b e r ( e n g i n e e r i n g )
Mohammad Faruque Alam and Unicorn
Leather Goods Factory managing
director Kang Yanhong signed the deal
Bangladesh leather export
falls in 10MFY20
As per data released by Bangladesh
Export Promotion Bureau (EPB),
Bangladesh government recorded a
significant fall of 13.09 per cent to
US$29.49 billion in the first ten months of
the current 2019-20 fiscal year (FY),
against US $33.93 billion in the
corresponding period of last FY.
Exporters and experts attributed closure
of factories, lockdown in major export
destinations followed by slow demands
and orders cancellation and hold up due
to ongoing Covid-19 pandemic for the
drastic fall in performance. The slides in
export of all commodities were observed
including leather industry.
Bangladesh leather industry has earned
an export revenue of US $700.93 million
on behalf of their respective organisations
at the BEPZA Complex in Dhaka.
The company will invest $1.02 million to
produce 1 million bags, belts, wallets and
various leather items annually and
employ 764 Bangladeshi nationals.
BEPZA secretary, Md Nabirul Islam,
general manager, (public relations)
Nazma Binte Alamgir and general
manager (investment promotion), Md
Tanvir Hossain were present, among
others, at the signing.
during the first ten months of July – April,
FY 2019/20 as compared to US$ 837.7
million earned in same months last year. It
translates a fall of 16.26 percent on YoY
basis due to drop in earning of finished
leather, products and footwear during
this period, according to data of EPB.
The break down shows that Bangladesh
exported US$ 90.47 million of finished
leather compared to US $ 147.09 million
in year ago ten months export period. It
shows a fall of 38.49 per cent. The leather
footwear exports also decreased by
15.86 percent to US $ 413.15 million
from US$ 491.05 million during this
reporting period.
The exports of leather products have also
decreased to US$ 197.30 million from US
$ 198.94 million of same months last
year. It translates a decline of .82 percent
on YoY basis.
The Bangladesh Export Promotion
Bureau (EPB) has set an export target for
leather industry at US $1.093 billion for
financial year 2019-20 (July – June)
compared to US $1.110 billion
earmarked for the previous fiscal year.
TRADE CHRONICLE - May.~ June. 2020 - Page # 16