The leather goods market was projected to grow at a CAGR of around 6.2% between 2020 and 2025, having weathered a sharp fall in fashion demand across the EU, UK, US and Japan during 2020. Tanneries in Bangladesh and Argentina sought financial support, while production in Brazil, the US and Italy saw double-digit declines.
Automotive leather upholstery manufacturers in the US and Malaysia also paused production as car sales slowed in the UK and EU. Among consumer brands, Burberry reported losses, while Adidas and Mulberry showed earlier signs of recovery.
China remains the world's largest producer and importer of leather, manufacturing more than double the volume of second-placed Brazil, with much of its output exported to Italy, France, Vietnam and India. Italy ranks third as a producer and is a major importer of raw leather.
India is the second-largest producer of light leather and accounts for roughly 9% of global footwear production, exporting mainly to the US, Germany, UK, Italy, France, Spain, the Netherlands, the UAE, China, Hong Kong, Belgium and Poland.
Cross-border leather trade depends on clearly drafted contracts covering pricing, quality specification, payment terms, delivery and mode of transport — the kind of documentation and credit-enhancement support that sits at the centre of MTG's trade-finance consultancy work.
This market commentary is provided by Merchant Trade Guarantee Corporation Company Limited (MTG), a non-bank financial company specialising in trade and structured-finance consultancy since 2000.