KARACHI: Tanneries across the country have received 20 per cent fewer hides during the recent Eidul Azha while paying a higher price for the raw material used in the leather industry.

Low arrival of hides at the tanneries suggests that sacrificial activity was considerably less this year.

Talking to Dawn on Saturday, Pakistan Tanners Association (PTA) central chairman Anjum Zafar said that around 700,000-725,000 hides had been brought to tanneries all over the country, including 300,000-325,000 of cows and buffaloes, 300,000 of goats and 125,000 of sheep.

“The overall collection this year depicts a 20pc drop from 2020 owing to the Covid-19 pandemic, low purchasing power of the people, rising food prices, less spending by consumers and overall business environment,” he said.

Trade body says price of hides remained higher than last year’s

Tanneries purchased cow hides at Rs1,000-1,100 this year as compared to Rs700 last year. Goat skins were purchased for Rs210 against Rs170 last year while sheep skin was bought for Rs110 versus Rs80-90 last year.

On the export front, overall leather sector performed well in FY21 owing to rising demand after opening of the European and US markets, the PTA office-bearer said.

Pakistan fetched over $810 million from exports of leather-related products in FY21. “Our leather-related goods exports recovered in the outgoing fiscal year but still these cannot match the brisk exports some five years back,” he said.

According to figures of Pakistan Bureau of Statistics (PBS), leather garment exports rose by 14pc to $286m in FY21 from $251m in FY20 followed by 22pc rise in leather gloves to $260m from $213m and 5pc hike in leather footwear to $108m from $107m and 22pc jump in other leather goods to $23m from $18m in FY20.

However, exports of finished leather dropped by 12pc to $162m from $184m.

The PTA central chairman said the government has already been promoting an export-friendly culture.

“PTA and the Ministry of Commerce (MoC) are now engaged on how to further promote export of finished leather and goods in FY22.

We have given a conservative estimate to take the export of leather products to $925m in FY22 from over $800m in FY21 based on rising demand in Europe and the USA,” Mr Zafar added.

To meet the soaring demand of foreign buyers, PTA has also sought some incentives from the government including the restoration of duty drawback on local taxes and levies (DLTL) on finished leather followed by subsidy in treatment plants. He said treatment plants are expensive and tanneries consume a sizable volume of water for cleaning of waste water coming out from the tanneries.

When asked whether low arrival of hides coupled with their high prices would affect exports this fiscal, he said these two factors are unlikely to create any serious problems for exports of finished leather and leather products as demand is high from the foreign buyers owing to the upcoming winter season.

He said the exchange rate did not play any big role in exports in FY20 as exporters were upbeat over soaring demand from the foreign buyers.

Published in Dawn, August 1st, 2021