Prices and supply destabilised

AIT, a family-owned company, established in 1954 as a trading company, have an established network of their own processing plants located in the most important cattle regions throughout Australia. The company's other products include: • Brine-cured, pickled and wet-blue hides; • Drum-salted sheep and lambskins; • Salted pickled and wet blue kangaroos • Finished kangaroo leathers Topper said that towards the end of March/April the resultant shortages spurred prices to record levels with tanners 'having little option but to reluctantly follow. 'Although they, too, were partly successful in achieving increases for their finished leather they were unable to keep pace with the ever-spiralling hide prices', he said. Slaughter volumes from 'clean' origins such as the US and Australia were being easily absorbed with US speculators, in particular, enjoying a 'frenzied' trading environment caused by the existing uncertainties. He said the partly successful measures taken by the European governments towards the middle of this year to eliminate the BSE/foot and mouth diseases finally gave tanners and manufacturers some confidence to resist the 'ever-increasing price levels'. During the past couple of months raw materials prices had plummeted by 20-25%. 'As is usual in such circumstances many customers, particularly in the Far East, have been seen to have dishonoured previously purchased contracts, and tanners, themselves, have been caught with extensive leather inventories which have critically tightened their cash flows', Topper said. With prices seemingly having firmed again in the past few days (speaking in late August), perhaps we may have now seen the bottom of the market for the time being. 'However, it remains to be seen as to whether tanners have sufficient resources to maintain some stability in the market place.'