Leather prices fall as exports vanish19 February 2009
The leather industry in Myanmar is facing tough times as international demand slumps and prices plunge, according to a number of leather sellers in Mandalay. U Aik San, the owner of Sunshine leather shop in Mandalay, said wholesale leather prices have fallen by half. He blamed the collapse on the global financial crisis. ‘Leather prices have fallen by about 50% since the financial crisis began', he said.
Ko Aung Thu, the owner of the Jaw leather shop, also put the price fall at 50%. ‘Prices and demand are falling at almost the same time. With so little interest in our products we have had no choice but to rapidly drop prices to keep making money. ‘Unfortunately, I think this is likely to continue', he said.
Prices at the major leather markets in Mandalay all recorded significant drops - some as high as 75% - in December: One sheepskin was about K1,500, down from K3,600; one deer skin was about K3,500, down from K8,800 previously. A goat skin slipped from K2,700 to K700; buffalo shed K1,150 to sell for K1,050; and 1 viss (one viss = 1.6 kilograms or 3.6 pounds) of cow hide fell from K2,600 to only K500.
Mandalay is famous for its leather products - including shoes and jackets - and there is usually heavy demand for these items between September and February as temperatures in many regions fall. Travellers in particular, especially those in open air transport such as open top buses or motorcycles, like leather jackets that typically sell for K30,000 to K100,000 depending on the quality of leather used.
U Aik San said the thinner leathers (deer, goat and sheep) are mainly used to make the leather jackets, while the thicker cow and buffalo hides are used for shoes. ‘At our shop we stock more than 100 different kinds of leather products. Although they might be relatively expensive, clothing and footwear made from leather is durable and very warm. And demand for these products is always strong at this time of year but that is not the case this year', he said.
He blamed cheap imports from China for the diminished demand. Ko Aung Thu said the halting of raw leather exports to China had flooded the domestic market, which pushed prices way down. ‘China previously bought up lots of our raw leather since 2000. At that time, we were competing with Chinese buyers to purchase leather, so prices were high. But after the Olympics, these buyers simply disappeared and the prices have been falling ever since', he said.
An official from the Myanmar Livestock Federation said the exports of animal skins are being affected by the global financial crisis. ‘Due to the global recession, demand from foreign buyers has fallen heavily. We are discussing with exporters what we need to do to get reasonable export prices', said U Win Sein, the federation's vice chairman.
Source: Myanmar Times