Scarce supply from low kill

The numbers of cattle killed in June and July remained very low, resulting in a scarcity of hides and this caused prices to firm in July. Tanners in the UK reported that interest from their customers was best described as being muted and that business could be done, but only at a price. However, Italy did buy a lot of hides at higher prices for August/September delivery, and interest from China continued with sellers looking to the Shanghai fair for guidance as to the market for the rest of the year. A big increase in the kill in Ireland is expected to kick in during the middle of August and there will be a lot more hides available from Ireland which would normally result in lower prices. However, there are mixed opinions amongst sellers as to whether or not this will happen. If the big kill at the end of year does come, then hides will be very scarce in January and February 2005. This is all down to the de-coupling system that will come into effect on 01/01/05. Prices for Irish hides at the end of July were as follows: 36kg+ ..................... 81p ($1.49) 31/35.5kg ............... 91p ($1.67) 26/30.5kg ............... 95p ($1.75) 22/25.5 ................ £1.05 ($1.93) All prices are per kg green weight ex-yard. There was no movement in culled cow prices which remained at £18.50 ($34.00) per hide ex-yard. In the lambskin section of this report, we commence with the sad news of the running down of International Leathers (NI) Ltd in Killyleagh. This means that the tanning industry in Ireland will now be completely closed. The sad truth is that conversion costs in Ireland are too high and we cannot compete with the Far East. What has happened in Ireland over the last year should be noted. Throughout Europe, as China slowly under-cuts, the European tanning industry will go the same way as the Irish tanning industry. Prices for doubleface lambskins continued to decline as Turkish tanners experienced problems in selling their finished products. The Russian buyers are not expected before August 15 which is seen as the crucial date for the commencement of the season for selling to Russia. Poland has had teething problems with membership of the European Union, resulting in VAT payments added to the value of skins and it will take some time before Poland is a player in the market. If prices fall much further, the Chinese market will open up. Prices for Irish doubleface at the end of July were as follows: £6.20 ($11.40) per skin delivered Istanbul.