A heavy death toll of animals in the recent floods, stuck-up customs duty and sales tax refunds, interrupted power supply and anticipated gas shortages in winter may adversely affect leather and leather goods production.
Foreign demand is also weakening, as indicated by a 10pc year-on-year decline in exports of leather and leather goods during July-August 2014. “Much depends now on whether we can get sufficient supply of animals’ hides and skins during Eid-ul-Azha at right prices,” says a Karachi-based exporter.
However, exports can still count on two big positives: the quality of tanned leather has improved over the last few years pushing up per-unit price, and some exporters of finished leather goods have found new buyers abroad.
Domestic demand has remained strong, contributing to a handsome 11.6pc growth in leather industry in FY14. And there are no signs of this demand slowing down. Sales of leather garments, holsters, bags, sofa-cushions, handbags, purses, footwear and wallets are apparently stable both at high-end shopping malls and in traditional city markets.
