Extracts from the Sauer report

Prices have hardly changed although cow hides may now have reached price levels where at least some buyers are beginning to move. The dollar rate versus the euro, a catalyst for the trade during past weeks, does not seem to move anymore either.

The new liberation of the Chinese Yuan from the US dollar did not change anything in the raw material trade either. Sheep and goatskins are steady to softer and show less activity in most places. In short, if there is a right time to close for holidays it must be now. The SauerReport closed with this report and will resume on August 22.

The lamb kill in Spain is increasing as usual at this time of the year. Skin prices remain unchanged for the time being while business is scarce.

Following the demolition of the Anonima Lanera factory in Spain, managing director of Adobinve SA, J L Garcia-Sena, says that the Colomer Group bought the company Adobinve, formerly Tipel and Kunje Chun Nam, in the year 2000. The factory was in poor condition and stopped working after two years. The Colomer Group have invested more than €5 million to create an environmentally friendly

beamhouse for light skins with a first class biological effluent plant. This is able to produce more than 35,000 tanned skins daily, to the highest quality.

Today, Adobinve is a reality and the production is 60% nappa wet-blue and 40% doubleface crust, working for tanners from all over Europe, Türkiye and Asia.

Anonima Lanera is an old factory with a high quality history but is now in the middle of the city of Vic with more and more neighbourhood problems due to noise or smells. The message is that Anonima Lanera goes but Adobinve is up and running with a higher capacity than Anonima.

In Bulgaria the raw trade has come to a standstill. Some are preparing doubleface orders for shipment after the holidays but there is no new business at all.

The only New Zealand skin offers available remain third grades in large quantities. Europe is closing for holidays, certain Koreans are reluctant to honour their contracts and the slaughterhouses close their financial year by the end of September. All reasons to try and destock as much as possible. It is believed that he who has money to spend should be able to buy a couple of dozen containers of third grades at absolute bargain prices.

Greek wet-blue sheep still cost the same but wet-blue goat prices have dropped about 7%.

In Italy, slaughter has been stable but at a low level. Cow hides struggled to find buyers as in many other supplying countries. Calf, ox and bullhides are doing somewhat better and prices could be 5 cents higher.

Chinese raw domestic hide prices continue to increase. Offers are now between $1.81-1.93 with $1.83 already booked but $1.93 not reached yet.

In Rwanda, movement in the market is zero. It is becoming tougher to find buyers prepared to pay today's prices. Also those markets that were picking up goatskins as if they were for free are being more cautious. The price gap between sellers and buyers is widening. Who will be able to hold tight? Prices are unchanged.

A strange situation exists in the Sudan where it almost seems better to export raw skins instead of pickled and wet-blue. The argument is that the disadvantages of the pollution at home are bigger than the advantages since the added value in the first stages of tanning is minimal. The real value added comes after the wet-blue stage which was mostly done abroad anyway.

Most tanneries presently work at low levels and high production costs which hinders competitiveness on international markets for their pickled and wet-blue material. One of the biggest private tanneries (White Nile Tannery) has been closed since last year.

This is a remarkable development since in most countries people are fighting to reduce raw exports and create added value and employment at home. The competitiveness of semi-finished and finished products on world markets is, however, mainly over looked by politicians, tanners etc.

The most important news in mid July in Latin America was the drop in raw hide prices in Brazil where the industry is in real turmoil with many tanneries decreasing their soak dramatically, big packers resorting to salt or tan their hides rather than deliver them at 'unrealistic' prices.

This should have had an important impact on the Argentine market which, however, has remained unchanged due solely to the government pressure to keep existing levels in the hope that this will help to avoid price increases of meat sold locally. Leather business is slow on all fronts although more so in upholstery than shoe. Splits continue in good demand.

For Kenya, the Chinese market for raw cow hides has not revived. Surprisingly there is regular demand for wet-blue cows from India and some quantities have been shipped. The raw export market - wet salted and air dried - still does not move and prices on the local market are dropping. This is helping the very few tanners who are lucky enough to have the capacity to buy raw hides cheap and offer them in wet-blue.

With Bulleys being closed (this tannery had the capacity to produce 2,000 hides per day, the biggest in Kenya), there are only Bata, Blutan (Dermatech) and Azizdin left who are in a position to offer wet-blue hides at the moment. Their combined capacity will be less than 2,000 pieces/day.

The goatskin market remains the same. The sheepskin market is slowly getting poorer and due to get worse with the holidays in Europe.

In France, all is calm but to the surprise of traders certain abattoirs have increased their hide prices. Reasons: short supply and the improved cutting business in Toscana/Italy. Nobody, however, sees this as a valid reason to increase sales prices to tanners.

No other country in Europe has increased its sales prices, so why France? Still, that is what some sellers have done for their heavy cows. Calfskin prices on the contrary have decreased by about 10 cents. Lambs remain the same and are uninteresting at present.

Nigeria is very quiet. Spain is out of the market for Nigerian skins and Italy has seen the interest of June disappear these first weeks of July. The general demand for shoe suede has dissipated a lot as well. Prices remain unchanged. Of course there still is a market for the right top quality skins (of which there are few) at the right price as is always the case in Nigeria.

A number of European countries show kill figures 30-50% below those of last year which guarantees there are never too many hides hanging over the market. Reasons for the strongly reduced slaughter in the EC include the import of cheap meat (from South America and elsewhere) and the general lack of animals due to high EC premium killings which took many animals off the streets last year.

Of those available, a decent number are taken fresh by tanners in Europe. Consequently there are not many hides left to salt and trade on the free world markets and consequently the prices do not collapse. Cow hides from elsewhere (USA for instance) are no alternative for the European buyers of fresh hides and thus no competition even if they are cheaper.

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