The Aegean leather business, already regressing due to a decrease in luxury consumption due to the global financial crisis, faces difficult times as Russia has closed down customs.
Aegean leather exporters have called attention to the fact that the $90 million worth of exports from the first half of 2008 has decreased by 42 percent to $51 million for the same period in 2010.
“Russia, to whom we export 60 percent of our goods, has closed down customs,” Jak Galiko, the Aegean Leather and Leather Products Exporters' Union Chairman commented to the Doğan news agency about the sharp fall. “Cargo cannot go there and the reference prices are considerably high. The buyers haven’t been able to adjust to the situation either. Rather than sending products by cargo or private bills, they prefer the normal export process.”
Drawing attention to the inevitability of a recession in production paralleling that experienced in exports, Galiko expressed distress at the exchange rates currently affecting the eurozone, an export market of high significance to the leather and leather goods business.
“The key point to increasing our competitive power is to solve the issue of the excessively valuable Turkish Lira,” Galiko said. “Turkey has no chance to compete with this rate of exchange. Brazil and China keep their money at a low value. We, on the other hand, keep the value high despite inflation.”
“Our products are bound to go to those with a high purchasing power,” Galiko said. “We have no other alternative. We don’t have the option of going outside our current markets either.”
