Official Laments Government’s Leather Policies
EghtesadOnline: A total of $7 million worth of unfinished leather and wet-blue (processed raw hide before turning into finished leather) were exported from Iran during the first five months of the current Iranian year (March 20-Aug. 21), according to the head of Hide and Wet-Blue Producers and Exporters Union, who doubles as the head of Iran's Export Confederation.
“Exports have seen a drastic decline over the years due to faulty policies implemented by the government," Mohammad Lahouti was also quoted as saying by Fars News Agency.
Iran had around $200 million worth of unfinished leather and wet-blue exports in the fiscal 2012-13, which figure fell to $35 million last year (March 2019-20).
The decrease in exports, said the official, has many reasons, the main one being that since government officials believe leather and wet-blue exports are exports of raw material, they have imposed duties on the export of these products.
“This is while these products are not raw material, and unfinished leather and wet-blue have in fact generated 25% and 40% in value added respectively,” he added.
Lahouti noted that producers face other handicaps such as government bans on imports of production line machinery and raw material under the pretext of “supporting domestic production”.
“Iran produces a large quantity of hide due to abundance of livestock in the country, yet domestic consumption accounts for only 15% of the total production and the remaining 85% need to be exported,” he said.
“Leather from Turkey, Italy, Spain and Pakistan, our rival countries, are exported at a 5% tariff, whereas Iranian leather is taxed a hefty 20-35% in export tariff. This robs us of the opportunity to compete in the international markets despite the high quality of our products.”
Iran’s leather industry is more than 100 years old. Considering the high quality of Iranian hide, the ultimate beneficiaries are Iranian hide importers who use the raw material to produce highly desired leather goods while Iran suffers from the environmental pollution caused by hide production.