United States and the Rest of the World

The situation of the US hide market remains unclear (and the same can be said about hide markets in the rest of the world). Since the start of the new year business everywhere is struggling to get on its feet and move forward again while opinions and advice come from all directions indicate often contrary feelings. There have been good hide sales in the US during the year end which sellers now use as arguments to refuse further reductions, to turn down bids and in some cases to even ask for higher prices. Disappointing meat business without rapid improvement in sight makes packers believe the kills will remain low all through Q1 and thus guarantee hide prices will remain high. On the other side we hear of tanners simply refusing to pay more, to withdraw from the markets when their low bids are not accepted. They are aided by stories that still plenty of sellers are operating behind the curtains and accepting lower prices. All this confusion is well reflected in the daily prices we see today which are sometimes a bit up and sometimes a bit down. What does remain clear however is that US cow hide prices show more stability than steers and may indeed be called steady for now. The same cannot be said about steers. As a matter of fact not much can be said about anything and we just have to wait and see how the markets will develop. With all the arguments pro and against higher prices as documented in our first reports of this year we can only say it can go both ways still. Even the US kill does not change much and for this week the forecast is again 560,000 head. The Chinese New Year is approaching and this week is the last one to ship from the US to China before the annual closures. This usually is the start of a quiet period in the trade. But this year even this is being countered by reports of Chinese tanners who will keep skeleton work forces available to receive merchandise during the holiday period, with as most likely explanation that the goods are badly needed.

Australia

Sources report much greater interest and bidding for hides. It is thought the Chinese still hope that the market will fall back further but we may be at or close to the bottom. Those who believe in the latter say that if tanners don’t start buying now they may miss out altogether and have to pay higher prices. But like elsewhere nothing is yet sure however! Exporters say they sold good volume last week. Prices were not fancy but the volume which has been absent for months has returned. Not enough to make anybody excited but it sure is encouraging.

Brazil

For week 2 of the year the CICB national raw hide price index dropped a meager 2 cents to 3.44 BRL per kilo. Meat/hide/leather giant JBS now proudly holds 18 medals (16 gold and 2 silver) for A grade traceability against the Leather Working Group (LWG) protocol. Bravo!

Portugal

For the fifth year in a row the Portuguese footwear industry showed another increase of 8.8% in exports (footwear of all kinds) after an almost similar figure in 2013. By the end of 2014 exports have been valued at 1.85 billion EUR according the industry association APICCAPS. There are not many countries in Europe (if any at all) which can show similar success. The industry comprises of some 1350 companies and 35,000 jobs.

South Africa

No new business reported yet and exporters still shipping out pending contracts which for the moment keeps the raw hide prices firm.

New Zealand

As commented end of December the market is getting firmer and quite sensibly so. Many markets show interest in New Zealand skins, mostly the Chinese who are trying to catch up for all these months they have lost without buying, but also Korea, France and India. The volumes of sales of pickled and wet-blue lambs have increased significantly compared with last season (+ 50 % in October/November). Sales of salted lambskins are less important than last season (- 25 %). The demand for sheepskins is still shy, although some signs of improvement are visible.

Uzbekistan

Most hide and skins prices are higher than in December.

Sauer Indexes

The drop of 4.4 points in the Upholstery/Auto Hide Index versus the 1.3 point drop of the overall General Global Hide Index is mainly due to the strong reductions in American hide prices since our previous index of week 50. The general hide index, which includes hides from all over the world (including the US) and of all qualities, shows that no hide prices dropped more or even equivalent to those in the US. The sheepskin index is down but according to the very latest news may show its lowest point here and show increases again soon. The goatskin index shows no big changes as usual.