Pakistan’s leather sector struggles to compete
The floods in Pakistan have done nothing to help the country’s exports. As well as claiming the lives of many people in the country, the disaster has also killed many livestock.
However, industry experts claim the sector was already struggling. Livestock smuggling is a real problem and increased leather production costs have added to tanners’ burdens. There are also claims that the government failed to release funds allocated under the Strategic Trade Policy Framework 2009-12 and Trade Policy 2009-10.
Reports suggest the supply of hides and skins in Pakistan had already fallen 20% and that leather exports fell to $900 million in 2009-10 compared with $1.24 billion in 2007-08. Leather and leathergoods exports for July 2009 to May 2010 totalled just $764 million.
Pakistan’s leather sector provides around 500,000 jobs and comprises approximately 800 tanneries. However, there are fears that problems within the country and competition from outside could lead to many closures.
Tanners, led by the Pakistan Tanners’ Association, have appealed to the government to introduce new and enforce existing laws that would benefit local tanners. Many claim the country’s main competitors—India and China—have been offered a range of incentives to help leather and leathergoods manufacturers thrive.
India’s leather and leathergoods exports increased steadily up until the economic downturn towards the end of 2008. They rose from $1.9 billion in 2002-03 to $3.5 billion in 2007-08, showing an annual growth rate of 11.9%. The growth rate dropped to 1.5% the following year, with exports totalling $3.5 billion. Exports for 2009-10 are expected to fall this year; however, its target for the next financial year is $5 billion.Pakistani tanners believe this ambitious target, and the growth it has seen within the Chinese leather sector, is related to the government assistance they have received and is urging its government to follow suit. It is also appealing for a total ban on livestock exports.
