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Export orders for leather and leather goods dropped significantly in the last few months of 2013 due to the ongoing political unrest, industry leaders in the country have said.
Buyers usually place orders after physically visiting the factories. But after recent political unrest buyers are vehemently avoiding visiting Bangladesh of late, said Mohammed Nazmul Hassan Sohail, Managing Director of Leatherex Footwear Industry, a leading leather goods exporter. “We are very concerned about new orders, where are they going to come from if the buyers do not arrive?” The company has experienced a 15-20% drop in new orders in the last two months. “We are passing through a very difficult time,” said Mohammad Abu Taher, Chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association, adding that foreign buyers have almost stopped providing new orders due to the political turbulence. The value of the lost leather orders over the past two months could be around $150 million, according to Shaheen Ahmed, Chairman of Bangladesh Tanners Association. Md Saiful Islam, Senior Vice-President of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, however, said the full impact of the political unrest would manifest in the first quarter's export data.
Many commentators also point to negative publicity about the ongoing environmental and working conditions in the country that has been highlighted by major international media outlets and NGO’s such as Human Rights Watch. Although business leaders in Bangladesh blame political turmoil, many foreign buyers will be looking to source from other countries, which have a better environmental, health and safety and working conditions record.
The Managing Director of Picard Bangladesh, Islam expects export orders to fall by a half if the present unfriendly business environment continues for another two months. If the political deadlock is not broken through immediately, manufacturers said they will not be able to reach the export target of $1.21 billion set by the government for the fiscal year. Between July and November, exports of leather, leather products and footwear rose by nearly 40% year-on-year to $510 million. Exporters assert those earnings came from orders placed before the political unrest began. Bangladesh exports leather products mainly to Italy, New Zealand, Poland, the UK, Belgium, France, Germany, the US, Canada and Spain. Also, Japan, India, Nepal, Australia and some other countries are emerging as potential importers of Bangladeshi leather goods. The industry earned $980.67 million by exporting leather, leather products and footwear in the last fiscal year, up from $765.03 million recorded in fiscal 2011-12, according to EPB.