Leather Exports Rise 5% Despite Euro Zone Crisis.

Leather products exports touch $811 million in June quarter
Indian leather exports have seen a rise of five per cent during the first quarter of the current financial year amid volatile economic situations in Europe, a major destination for Indian leather exports.

For the period April-June 2011, export of leather and leather products were up 5.07 per cent at $811 million as against $772 million in the corresponding period of previous fiscal, according to Council for Leather Exports (CLE).

“Though there is still a good demand in Europe for our leather products, the increase in raw material costs are hitting the margins of exporters as there is no matching increase in prices of the products. However, we will still achieve some growth,” said M Rafeeque Ahmed, chairman of CLE.

“Though the Euro currency situation is presently in our favour, we have to wait and see. However, the instability in Euro Zone is a worrying factor,” he added. Segments such as leather garments and goods have reported strong growth during the first quarter. Leather footwear posted single digit growth while finished leather, footwear components and non-leather footwear registered fall.

Footwear exports, which accounts for major exports, grew by per just 5.21 cent at $316 million during April-June 2011 when compared with $300 million in the same period a year ago.

However, the key highlight is revival of strong growth in leather garments segment, which grew by 18 per cent at $79 million as against $67 million in the previous year. Garments segment was registering negative growth in exports in the past few quarters.

After a period of stagnant and negative growth during 2008-09 to 2009-10, leather industry is gearing up to achieve higher growth in coming years by market expansion with supportive measures from government.

The government has fixed a target of $8.5 billion for the Indian leather sector to be achieved by 2013-14. The industry has to achieve an annual growth of about 26 per cent (as against the present level of about 10.5 per cent) in order to achieve this target. During 2010-11, industry achieved 13 per cent growth in total leather exports at $3.84 billion.

Source : mydigitalfc.com