'China buying leather goods from world markets at high prices'

China is buying huge quantities of leather products from available stocks in world markets at very high prices. Fawad Ijaz Khan, Chairman of Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) said on Tuesday that Pakistan leather industry had displayed its finished leather, leather garments and other leather products in Asia Pacific Leather Fair (APLF) held in Hong Kong last week.
The APLF is the largest international exhibition for leather and leather products in the world. Pakistani exporters had set up 85 Stalls (19 of leather garments and 66 of leather) to display their products in APLF 2011. "During the APLF 2011 it was observed that China was buying huge quantities of available stocks of leather at very high prices and most of Chinese importers were interested in buying bulk quantities of leather, irrespective of price," Fawad said.
He said that most of the leather is going to China for production of shoes, leather goods and garments due to huge demand of local Chinese market. Because of the booming economy the Chinese consumers are paying high prices for finished leather products than the prices fetched by Chinese exporters from foreign customers. "Our government has signed a Free Trade Agreement (FTA) with the Chinese government which allows duty-free exports of leather garments from Pakistan to China," Fawad said, adding that this would give a big advantage to Pakistan's leather Industry since 10 percent import duty on leather garments is exempted for Pakistani exports under the FTA as compared to imports from other countries.
He said that because of huge increase in the prices of finished leather the prices of leather garments have risen by 20-25 percent. Most of the big European and North American buyers are not accepting this price increase and they are reducing their purchases as compared to last year.
Consequently, the quantities of leather garments exported from Pakistan will be reduced in the coming months whereas the export value will not change much. Fawad said that in future more quantities of finished products of leather will be sold in China because of its rich economy as compared to other countries of the world since the global growth in livestock is only around 2 percent.
The exports of leather garments increased by 18.53 percent during July-February as compared to corresponding period of last year. On the other hand, leather exports surged by more than 44 percent during the same period. Fawad said that in future Pakistan leather garments industry will exhibit in the international fairs of leather garments in China and PLGMEA is also planning to send a trade delegation to China in collaboration with Trade Development Authority of Pakistan (TDAP).