The 9th largest exporter of leather in Asia, Bangladesh holds a market share of around 0.72 percent, placing the country as the 27th largest leather exporter globally. In FY 2023-24, the leather export receipts of Bangladesh amounted to ~USD 119 Mn. 

Out of this sectoral export, tanned and processed leather contributed to around 99 percent. A significant portion of this is fueled by the tanned or crust hides and skins, awarding the country a 0.86 percent share of the global tanned leather exports. The tanned leather from Bangladesh is mainly exported to leather export market leaders such as Italy, China, and India, revealing the untapped potential of the country in generating value through ensuring quality in leather processing.

Figure 1 Tanned and Processed Leather Export Receipts from Bangladesh (in millions)

Dynamic Asian Market for Crust Leather

In the leather value chain, value addition begins with the production of tanned or crust leather, where raw hides and skins and wet blue leather are processed through stages of weighing, pickling, tanning, splitting, shaving, conditioning, and trimming. The quality of the finished leather depends on the intricacies maintained during these stages. 

In FY 2023-24, the tanned or crust hides and skins export receipts for Bangladesh amounted to USD 99 Mn2 and held a significant portion of the leather exports, where a dominance of the Asian markets can be seen, where China is leading by importing around 62 percent of these exports. 

The export portfolio of Bangladesh had 35 countries in FY 2023-242. Over the past five years, China’s share in exports has nearly doubled, showcasing strong trade momentum in a key market. While other destinations currently show a smaller share relative to this growth, the overall market size for many of these countries continues to rise, presenting a valuable opportunity to diversify and strengthen trade ties further. 

The prominence of global top-tier tanned leather exporters in Bangladesh’s export portfolio reveals another story for the country. It highlights the unrealized potential of Bangladesh in producing premium-quality tanned and processed leather, capitalizing on its significantly high raw hides and skins production. This underscores the notable avenue for the country to focus on strengthening the production value chain of high-value-added products.

With the growing number of initiatives to diversify the export basket of the country, it is only a matter of time before Bangladesh rises to the top of the tanned and processed leather market by strategically investing in advanced processing techniques, quality enhancement, and sustainable practices.

Emerging Markets Signifying Potential

While, due to the disruption in the global value chain, the export portfolio has experienced negative growth in some of the top countries, over these 5 years, the sector has also seen significant positive growth in export receipts from countries including Indonesia, Netherlands, Cambodia, Turkiye, Thailand, and Australia. In their efforts for market expansion, Bangladeshi tanned or crust leather exporters have also explored new or old markets in the past few years, where the destinations include the United Arab Emirates, Norway, Sri Lanka, Malaysia, and Lithuania. 

Table 1 Notable destinations for tanned or crust leather from Bangladesh

Export destinations for tanned or crust hides and skins	Export Growth in FY 2023-24 (%, Base Year FY 2019-20)	Growth Trend
Top 10 destinations
China	164%
India	10%
Italy	-17%
Spain	-57%
Viet Nam	237%
Taiwan	39%
Hong Kong	-80%
Japan	-63%
Korea	-61%
Portugal	54%
Emerging destinations
Indonesia	1300%
Netherlands	467%
Cambodia	434%
Turkiye	385%
Thailand	350%
Australia	311%

Such progressive developments signify the rising potential of the leather exports of Bangladesh and highlight the importance of building stronger relationships with existing and new markets, leveraging market insights.

The article was authored by Ainan Tajrian, Business Consultant at LightCastle Partners. For further clarification, please contact here: ainan.tajrian@lightcastlepartners.com