Woolskin exports double in value

They also achieved more than double the value of exports compared with the previous year, according to managing director of Tanwell International, Alan Hopkins. Hopkins is well known from his role representing the Australian Fellmongers Association but, as he told Leather International: 'There used to be twelve fellmongers; now there is one!' The rise in the number of woolskins has resulted from increased slaughter and sales of stocks. The large increase in value was the result of the rise in quantity exported, a global strengthening in demand for woolskins and the outbreak of foot and mouth disease in South Africa, the UK, and Europe. The strong depreciation of the Australian dollar (especially against the US dollar) was also a factor. Hopkins said total exports comprised 16.9 million sheepskins worth A$22 million and 15.7 million lambskins worth A$55.6 million. More than 90% were bought by only four countries: China, Türkiye, the Russian Federation and Belgium. China dominated the Australian market as it alone accounted for 75% of exports. China purchased 12.7 million skins worth A$91.4 million and Türkiye bought 1.5 million sheepskins worth A$16.2 million or 9% by quantity and 13% by value. Exports to the Russian Federation showed strong growth as the Russian tanning industry began redevelopment, spurred on mainly by sales of oil and the introduction of higher duties on the import of finished leather products and exports of raw skins and hides. Sales of raw materials to Russia recently were almost negligible. The purchase of about 550,000 sheepskins (3.2% of exports) valued at A$2.7 million (2.2%) had seen it 'climb quickly' to being Australia's third most important export market for sheepskins. The export of lambskins in 2000-01 was similar to the position with sheepskins although there was less dominance by China. Five markets accounted for more than 90% of lambskin exports: China, Türkiye, New Zealand, the Russian Federation and Japan. 'While China dominates in terms of quantity it is almost of equal importance to Türkiye when value is considered', Hopkins said. 'China imported almost half of these lambskins but represented only 36.7% of the lambskin export value. In contrast, Türkiye imported around 25% of lambskins but accounted for 35.5% of the total value. 'This indicates that the higher prices are paid by Turkish tanners to get the better quality skins and continues to reinforce the belief that China is mainly a low value market. 'New Zealand accounted for 11% of exports by quantity and 13.5% by value. The Russian Federation's climb into prominence was similar to that with sheepskins and amounted to about 3% of exports.' Hopkins said supplies of green skins were high throughout the 2000-01 fiscal year with record lamb slaughter as farmers took advantage of record high prices for lamb and mutton. Despite predictions that there would be much lower lamb slaughter in early 2000 they continued at a high rate and fell away as winter set in. Since then lamb slaughter had recovered to only about 75% of the previous year's figures with farmers continuing to turn lambs off early while prices remained high. This had affected the export of lamb meat and the skin market because lambs were being turned off lighter which resulted in a lesser yield of meat and skin area. 'Supplies of sheep for slaughter have been reduced as farmers, excited by good returns, continue to build stocks', said Hopkins. 'Some areas, which previously have been important for the supply of mutton, are still affected by drought, so, combined with re-building of stocks, it is likely that there will be lower slaughter of sheep in this financial year (2001-02).' The 'preferred buyer' approach adopted by supermarkets to sales of their green skins has affected the Australian industry. It meant that a significant proportion of lambskins had been removed from the tender system which in turn had caused some skin packers and exporters difficulty in obtaining supplies at viable prices. Another issue for exporters was that while the depreciation of the Australian dollar had helped profitability exporters had had to seek additional finance to buy, process and ship skins which cost them more on lower margins. This had led to problems of cash flow and reduced profitability. 'The last eight months has seen the demise of two exporters and it is likely that unless the supply of skins and the economics of the situation changes more will follow', Hopkins said.