Leather Export Growth Fails to Ease Local Crisis

Despite positive export growth in the leather sector, long-standing crises and mismanagement in the domestic market have left businesses deeply frustrated. Although exports of Bangladeshi leather and leather goods have remained in the billion-dollar range globally, the sector continues to struggle with multiple challenges at home.

Industry insiders said the main reasons behind the frustration in the local market include the lack of fair pricing, capital shortages and financial losses, CETP and certification-related complications, and the dominance of middlemen.

According to data from the Export Promotion Bureau (EPB), leather and leather goods exports reached $988 million during the first 10 months of the current fiscal year (2025-26), compared with $932.5 million during the same period of the previous fiscal year. Export earnings from the sector rose by 10.19 percent to $1.14 billion in FY2024-25. In the previous fiscal year (2023-24), the sector earned $1.03 billion from exports. Earnings fell slightly to $1.17 billion in FY2022-23, down from $1.24 billion in FY2021-22.

Sector insiders said annual export earnings from leather and leather products have remained above $1 billion in recent years, but the industry has failed to build strong links between domestic and global markets due to the lack of modern technology and proper management. They said the sector cannot achieve overall development without ensuring environmental compliance and implementing a long-term strategy.

Sources said marginal collectors and seasonal traders often fail to sell rawhide at government-fixed prices. A sharp rise in salt prices, a key material for hide preservation, along with transportation costs and lengthy processing expenses, has caused significant losses for grassroots traders. The dominance of middlemen in the collection and marketing chain also prevents marginal farmers and sellers from directly benefiting.

The leather sector has remained trapped in a deep crisis for years due to widespread mismanagement, syndicate control, and failure to meet international standards. Seasonal traders and warehouse operators at the field level say they are losing capital and suffering severe frustration because they cannot secure fair prices.

Tannery owners said the authorities must ensure the full-scale operation and reform of the CETP while taking initiatives to obtain Leather Working Group (LWG) certification in line with international standards. They also called for duty-free facilities on chemicals used in leather processing and easier financing support for the industry.