Subdued summer market

As prices on all selections fell at the end of July, many tanners moved in on the good trading conditions. Following a brisk trade into early August, the prices steadied on most selections except on the branded hides. The market price of branded selections fell a further 2-3% while the bargain hunting tanners refused to pay higher prices. According to the export figures, rare buyers of US hides such as Uruguay, Brazil, Türkiye and, to a lesser extent, Spain and Germany all entered the market at the end of July/beginning of August. Holiday period As many Europeans set off for their summer holidays in August, it was left to Asian, mainly South Korean, tanners to bid for hides after they returned from their vacations. Packers suggested that they would lower prices on selections such as Texas steers if enough volume was sold. The price steadied at $64.50 a piece. Total raw hide sales for the last week of July were recorded at 540,700 with the Koreans taking 221,550 of them. Sales to China and Taiwan were also reasonable if not spectacular. As well as the branded selections Colorados, holstein steers and dairy cows were all quiet with the latter fetching $37-37.50 a piece. In early August, it seemed that only heavy native steers appeared to be selling well at an acceptable price for the hide suppliers. It is anticipated that demand will pick up once tanners return from their holidays. The US packers were particularly keen to see South Korean leather producers return to market. Packers were set to hold on to $64.00-64.50 for Texas varieties in an attempt to firm the market. Cautious expectations A number of Asian, particularly Chinese, tanners visited the WSA and Global Leather footwear fairs in Las Vegas at the beginning of last month and reported slowish demand. Many could not see much sign for optimism until the autumn. The quiet retail sector in several major markets, including the US and Japan, will have a direct impact on the hide prices. If the large Asian volume tanners are not selling as many leathers for the footwear makers, it is anticipated that demand will reduce over the coming months. Leather buyers at WSA said that they were going to be cautious with their spending as they predict slow sales of winter items over the next few months. They were more upbeat about sales for next spring. At the time of going to press, reports had reached us of the closure of the Future Beef plant. (A full report can be seen in news.) It would appear that FBO were closely linked to another company making headlines in the US, the Safeway supermarket group. They held a 15% stake in Future Beef. Safeway were recently forced to withdraw 18 million pounds of ground beef suspected of being affected with a virulent strain of the E.coli bacteria. The beef was reportedly from a ConAgra meat plant in the US. FIS and exports Federal inspected slaughter for the three-week period leading up to August 4 gave a weekly average of 705,666 head compared with an average of 674,333 during the same period in 2001. Slaughter this year is up 4.4% against last year. In the same three week period, total raw hide export sales averaged 583,666 pieces. South Korea took 614,470 followed by China 463,500, Taiwan 185,400, Japan 156,800, Mexico 90,300, Hong Kong 76,000, Italy 61,800, Thailand 36,900 and Croatia took 24,300 mainly on behalf of Italian producers. As prices fell in early August and holidays began across the northern hemisphere, a number of smaller players entered the market. In the week ending August 4, Uruguay took 2,600 followed by Germany 2,500, Brazil 2,200, the Netherlands 2,200 and Türkiye with 800 pieces. Wet-blue sales averaged 68,766 pieces over three weeks. However, a massive 159,900 pieces were sold in the week ending July 28. Hong Kong took 71,600 hides followed by Taiwan 42,800, China 30,600, South Korea 4,600 and Spain with 3,500 items. This can be compared with total wet-blue sales of 26,600 and 19,800 pieces sold in the entire weeks before and after July 28. Other significant buyers of wet-blue were Italy and Mexico. Wet-blue splits averaged 376,289lb. Once again an average does not show the clearest picture as there were negligible sales at the end of July followed by a staggering 3,186,400lb worth of sales at the beginning of August. In the first week of the month Hong Kong bought 986,400lb followed by Indonesia 397,000, Spain 350,000, Thailand 151,800 and South Korea took 151,800lb. Hong Kong was also the largest buyer of wet-blue splits during the week ending July 21 when virtually all of 200,200lb were taken. In June, the number of US cattle on feed was down 3% compared with 2001 and the number of placements were down 6% and market items fell by 1%.