September 14: Export of readymade leather, a source of convertible currency, has been steadily declining as the demand for ready-made leather has taken a nosedive due to the Covid-19 pandemic.
Three industries including Asian Leather Industry, Nepal Tanning Industry and United Leather are exporting leather from Biratnagar to India and overseas. An industry in Biratnagar has been closed.
According to the data of Biratnagar Customs Office, 821,629 kg of leather worth Rs 105.94 million was exported in the last fiscal year 2077/78, which is less than the previous fiscal year 2076/77.
A total of 2,349,640 square feet of leather worth Rs 109.11 million was exported from Biratnagar in the fiscal year 2076/77. The export was less in FY 2077/78 than in FY 2076/77 by Rs 3.2 million.
In the fiscal year 2076/77, Nepali leather was exported to the international market at the rate of Rs 46.44 per square foot. However, in the previous fiscal year 2075/76, the exporters had exported leather at the rate of Rs 49.77 per square feet. According to the customs office, 5,783,010 square feet of leather worth Rs 287.82 million was exported in fiscal year 2075/76.
Fiscal year 2074/75 had been a golden year for leather exporters. The exporters were paid Rs 73.20 per square foot of leather that year. According to the statistics, 5,138,119 square feet of leather worth Rs 376.11 million was exported in the fiscal year 2075/76.
Processed leather is exported from Nepal to India, China, Italy, Mexico, France, Turkey, Latin America and other countries.
According to Hassan Ansari, director of Asian Leather Industries, there has been a global recession in the leather business. The industry has been exporting leather to countries including Mexico, France, Brazil and Italy. This time too, they have received some orders from those countries. However, the shipping agency in Kolkata is refusing to provide containers. Container fares have increased fourfold in the past 18 months, but shipping liners have not agreed to provide containers.
Entrepreneur Ansari complained that although the container fare from Kolkata port to China has increased from $700 to $2,200 and from $1,400 to $4,200 to Italy, the containers are not available during the time of need. He said that the Department of Transport under the Government of Nepal should show initiative and become active to facilitate the export of leather.
"How can we take orders when we can't arrange the delivery on time?" said Ansari, “So the government should be proactive in facilitating exports.”
Pervez Akhtar, vice-president of the Nepal Leathers-Tanners Association and operator of United Leather, claimed that Nepal's leather industry was using more than 80 percent raw materials available in the country.
However, he complained that leather exporters have not received the incentive from the government for the past four years. "We have not received any incentive for the last four years,” he said. He revealed that he was yet to receive more than Rs 2.5 million incentives.