Leather exports faced a setback in the current financial year after the fall of some leading currencies, including the Euro, against the US Dollar, said insiders.

The country's leather sector entered into the billion-dollar exporting club in the last financial year when shipment of leather, footwear and other leather products reached US $1.124 billion, of which $505 million was earned from leather and $378 million from footwear, according to the Export Promotion Bureau (EPB).

Following an outstanding performance of the leather sector, the government and businessmen set a target to earn $1.4 billion from the sector this fiscal year.

But shipment of leather declined by 1.14 per cent in the first nine months of the current fiscal year (July-March), the EPB data showed.

The leather footwear export climbed by 20-25 per cent growth, but leather and leather products export witnessed a plunge during the time.

Leather exports fell by 20.26 per cent as overall shipment was $304 million in July-March period of the FY'15, versus $381 in the corresponding period of the last year.

Export of leather products (excluding footwear) was $169.76 million, which was almost same as $170 million in the corresponding period of last fiscal.

However, exports of leather footwear grew 23.4 per cent by bringing in $354.22 million during the period against $287 million in the same period last fiscal year.

But sector insiders predicted that the export target of this year ($1.4 billion) from the broader leather sector might not be possible due to poor performance of leather and leather goods shipment.

Italy, Spain and other EU nations, Japan, China and the middle-east are major destinations of Bangladeshi leather (crust and finished) and leather goods.

The country exports 200-220 million square feet (sf) of leather worth US $500 million annually, according to the Bangladesh Tanners Association (BTA).

"Like many other products, exports of leather (crust and finished) and a few leather made products have also been suffering due to fall in the Euro, Japanese Yen and Chinese Yuan against the US Dollar," Md Shaheen Ahmed, president of BTA said.

He said that a falling Euro has dampened the country's overall exports.

He noted that the value of dollar has risen by more than 10 per cent against the world's major currencies including the euro, the British pound and the Japanese yen since early 2015.

According to the online currency converter, a global portal, one Euro was equal to $1.34 in June 2014, which became $1.21 in December 2014 and just $1.06 in April 2015.

Former secretary of Bangladesh Hide Merchants' Association and a crust leather exporter Md Delowar Hossain told the FE that quality crust leather is being shipped at $2.7 to $2.8 per sf now, which was $3.10 per sf last fiscal year.

He said following the plunge in global price, many of the exporters are storing leather in an expectation that the scenario will be changed in the coming months, which is building inventory.

He said the local requirement for leather has also been rising due to the escalating demand for Bangladeshi footwear.