Monday, September 6, 2010




There is good demand abroad for leather products such as garments, goods and shoes but Indian manufacturers and exporters find it difficult to get their asking prices even though prices of raw and wet blue hides and skins have increased considerably in domestic as well as foreign markets due to hectic purchases made by the products sector to execute their overseas commitments on time without any delay. It is reliably learnt that good orders are available for right and reliable suppliers of these items. When contacted, a reputed shoe manufacturer said that “there is no worry for export contracts as many customers are willing to place orders but the present high raw material prices make business unworkable and we have no other go except to carry on compromising with the present situation and expecting better results in future as we cannot stop our show”

They also import quite large quantities of raw and wet blue hides and skins from abroad. Their units are doing well in almost all places in Tamil Nadu as they are determined to continue to prove their mettle as regular, reliable and quality conscious manufacturers and exporters. Of course the policy of the government is also to encourage the leather products sector.


The recent announcement of Rs.1050 crore stimulus by the union government to labour intensive export sectors such as handicraft, leather, handloom, silk carpets, toys, engineering items and sports goods to prevent any slowdown in production and export due to unfavourable international trends is welcomed by all. The Commerce Secretary Mr. Rahul Khullar had pointed out that the policy changes in the offing in the U.S and Europe for cutting down government expenditure, increasing exports and decreasing imports could affect future prospects of developing nations.

The sops include an additional benefit of 2% interest rate subvention for pre-shipment credit, over and above the existing 5%, extension of schemes like Duty Entitlement Pass Book (DEPB) and Export Promotion Capital Goods (EPCG) up to June 2011 and March 2012 respectively to boost technological advancement.

The honourable minister for commerce Mr. Anand Sharma has made it clear that the announcement was because of “the fragile recovery and prevailing uncertainties” in the world markets and hoped that India would be able to achieve $200 billion target set for this fiscal as against the last year export earnings of $178.6 billion. The activities in the leather clusters show that the industry is marching forward increasing its production and export in accordance with the policy of the government.


While there are good export orders for the leather products, it cannot be said for finished leathers. There is restricted activity in it as exporters of finished leathers are unable to compete with those of leather products in procuring raw materials necessary for them. The present annual holidays in Europe can also be a reason for the slow tendency in the leather sector.

According to reliable sources, there is no much activity in finished leathers. Only some patchy business is taking place in goat upper, suede and lining leathers at almost unchanged prices even though as said above there is considerable increase in the prices of raw hides and skins. It remains to be seen what happens after the holidays are over. It is learnt that some tanners have sold their goat upper, suede and lining leathers at around US$2.00, 1.80 and 1.10 per sq.ft. respectively. This is just for the sake of indications. It is known to all that prices depend on the quality, selection etc.


In the Chennai leather market, there is good demand for tanned and wet blue goat and sheep skins as many big shoe manufacturers are buying their requirements but their availability is limited as many tanners have either curtailed or stopped their productions due to unworkable prices now. The good demand which existed for suede leathers from the beginning of this year or so is on the wane now and export sales are reported at somewhat lower prices. Tanned goat skins in selections like A, B and C linings are in good demand at slightly higher prices depending on the quality and selection due to demand from different quarters and shortage of these skins in the market. Even in places like Erode, Vaniyambadi, Ambur, Pernambut, Ranipet and many other places good demand prevailed for wet blue and crust hides and skins. As higher selections are not available in items like cow hides, shoe manufacturers have to depend on imports for it.
(VMK in Indian Leather, September 2010)


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