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Leather exporters in Kanpur face Europe meltdown heat
Industry fears 25-40 % drop in exports this quarter; chemicals imported from Europe have become costlier and reflect in pricing of the final product from India, say bizmen
KANPUR The leather industry, which saw a recovery from Covid blues, is in dire straits again, fearing a 25-40 % drop in exports this quarter due to a slump in its biggest market - Europe - because of the Russia-Ukraine conflict.
Exporters here said that there has been bulk cancellation of orders from Europe and the situation is such that factories working in three shifts a day have reduced operations to one shift.
After the Covid impact receded, exports bounced back and matched the 2018-19 levels, said Asad Iraqi, an exporter of footwear and leather hide.
He said business would not improve throughout 2023 as the cost of leather had gone up considerably. “Chemicals imported from Europe have become costlier and reflect in pricing of the final product from India. People in Europe and the US are not buying expensive items,” said Iraqi.
“All was going well, but Russia stopped gas supply to Europe in July-August, following which prices shot up. The impact of inflation has hit exports hard and orders placed in advance have been cancelled. Such is the impact in October that factories are running in one shift compared to three earlier. Even the US market isn’t picking up,” he added.
The Christmas season is considered the best for leather business in Europe and the US, but the demand is negligible this year, said another exporter Yadvendra Singh. “The business was excellent between January and August this year, but there has been a major slowdown since October,” he said.
Prerna Varma, who exports leather apparels, said the demand for horse gear had also dropped drastically in Europe.
“It is feared that exports would go down by 25-40% in the October-December quarter. And if the Russia-Ukraine conflict is not resolved, the situation is unlikely to improve in the next quarter,” she opined.
Council for Leather Exports regional chairman, Javed Iqbal, said the industry has tough days ahead and should brace for it. “All hopes for a recovery in this quarter are lost. Exporters hardly have any orders,” he said.
However, exporters are pinning hopes on the growing tendency among foreign buyers to move from China when it comes to buying leather products. According to them, China is losing orders to Indian makers.
“British buyers have asked us to make some changes to our products so that they don’t have to buy them from China,” said Singh and Varma.
Unnao-Kanpur Leather Cluster director, OP Jha, said this was an encouraging development and its impact would be visible soon.
