General

We should remember that hide sellers almost everywhere in the world increased their prices just before the Shanghai fair and kept them there. Most of them till today. However, one month and three leather fairs further down the road, many now admit that the extra has proved and still is unobtainable in most cases and that tanners are only willing to look at and maybe consider the prices as they were before these latest Shanghai top-ups. So back to pre-Shanghai levels seems to be the first task to accomplish if we want to see business develop. Prices then were already very high and at record levels. This should not be seen as a weakening market but as a correction of unrealistic increases (a few exceptions of course). Although many European tanners are still waiting for orders and/or blaming wrong trade fair timing as the cause, it is clear there is plenty of leather still to be produced (although maybe not as much as the same time a year ago) but prices must be workable. It is this reports believe that raw prices shall remain glued to the ceiling of what is possible for a long time to come but we must not forget the word – possible.

United Kingdom

Tanners in Italy do not want to give bids. They try to get higher leather prices but are hitting a brick wall they say. Some interest from Asia for machine pulled hides but 3-4 dollars below offers. The highest post Shanghai prices remain largely impossible to realize (read also under General). It has become a habit for certain sellers to try and knit business together by using smoke and mirror tactics which means playing around with qualities and weights to finally make a calculation fit and a contract made. This is very confusing however since it makes us look at prices with many dollars difference for hides which on paper have the same description. It makes the buyers in China always opt for the cheapest while other sellers who do not play the smoke and mirror games have to defend themselves and their prices by saying their hides are the genuine 36s 31s or whatever weight we are talking. In the end there is only smoke left for everybody. Because of these confusing tactics we are now looking at prices for UK 36 ox/heifers which range from 108 to 124 dollars!

Bangladesh/India

The authorities are going to try and stop the usual and illegal export of raw hides to India after the Eid-ul-Azha festival slaughter. Many thousands of hides are then smuggled to India where much better prices can be obtained. It goes without saying that all those hides will then no longer be available to the domestic leather industry in Bangladesh where they are badly needed.

Australia

The hide business is more difficult this week. Exporters are asking the Chinese to pay 1.50 USD/kg more but they just wont pay it. Bids are harder to get but by the end of the day but if the price is right some business is possible.

Russia and the sanctions

The 1st October is next week and as far as we know this will be the day that Russia will stop its exports of hides to the European Union as part of the revenge for the economic sanctions imposed. Exports of European made footwear were said to be one of the industrial product groups for which the Russian border would remain closed. We have heard no further news on these matters and wonder if any of our readers can update us on where we stand today. There is much confusion. There are exporters who do not wish to take the chance to see their goods refused at a Russian border and thus keep them in their factories and ware houses. But no exports means no income means no further production necessary means no need for leather purchases which means no need for the hides to make the leather. We also know that leathers and leather products initially produced for the Russian market have little chance to find buyers elsewhere because of the specific needs of this market. We do know about people moving around to try and find new buyers. But this is very difficult for these products. We also hear about imports and exports using third countries. The trade is usually quick in adapting to a specific situation and finding solutions. But it will not be easy, not without risk and not cheap either. So who can tell us more? Email us please. Russian consumers who have become important on the world leather goods markets are just as unsure about their future and many keep their wallets closed. They also reduced their travels abroad which used to be accompanied by lots of shopping. We continue to consider the Russian problems and the reduced economic growth in China as factors which could reduce global demand for leather.

United States

Some prices are a bit shaky a bit with a few higher and some lower quotations for steers and no changes for cows but all in a still quiet market. We shall call it stable for now. Hide weights are starting to increase while we are moving into the fall season. Not all tanners are happy with the heavier hides and may try to secure as many of the lighter weights as they can if availability and prices allow. We shall soon move our quotations to winter weights and possibly the new specifications as recently announced. We shall follow our American colleagues in this.

Kenya

On the local market the prices for cow hides are going up day by day. Unfortunately, this is not happening for goat or sheep skins. The local prices for both are still going down with sheep doing worse than goats. Some people are still exporting wet salted cow hides at the price mentioned in the report despite the export tax. Wet-blue hides are being shipped in good quantities to Italy and India.

New Zealand

A bit of small skin business is being done these days, thanks to the interesting prices which kept moving downwards. Stocks are still important with some suppliers and they are under pressure to sell before the end of their financial year (end this month). Top quality new season wool-on skins seem to have found a home. For the new season the outlook is a decrease of 3.3% of the lamb kill (19.5 million) and a fall of 21% of the sheep kill (3.3 million) reflecting the big kill this past season due to the drought in the North Island and the development of the dairy industry in the South Island. There is also a wish to rebuild the sheep crop which presently stands at the low figure of 29.8 million head.