Last year, exports of Russian leather footwear declined by 30 per cent compared with 1999, and the first quarter of 2001 showed a similar trend.

Meanwhile, imports of leather footwear are increasing. In the January-May period, 4.2 million pairs of leather shoes worth US$52.5 million were imported - virtually double that of the same period last year (2.3 million pairs valued at US$24.4 million).

The imbalance is caused by a lack of raw leather, which is mostly exported to the EU despite a 20 per cent customs duty. These exports are being stimulated by high prices due to the increasing demand for these materials in the EU, especially after the recent outbreaks of foot-and-mouth disease.

Russian leather footwear producers are appealing to the government for an embargo on the export of unprocessed leather to protect domestic businesses.

By Geoff Fisher.