Extracts from the SauerReport

Traders think they have little chance to see prices drop because there are so few skins around and advise tanners to follow the market if they want to be able to continuously service their customers.

Still the bigger sizes are most in demand be it in high or low grades. Lining leather trade is more in full chrome than EI tanned at present. There is modest activity in semi-chrome linings while garment suede still does not move.

Steady trade in wet-blue sheep is reported at unchanged levels. High selections are very few and buyers are ready to pay Rs5-10 more in order to secure them. Today's skins are a bit on thin side.

This will change in February/ March. Some patchy business in resin nappa was reported. Full chrome low grades keep finding buyers on the domestic market at prices that remain unchanged. This is a non-stop business.

Cows show steady business in wet-blue at firm prices. Higher prices have been tried but without success. Tanners do succeed, however, in selling unselected parcels containing all grades.

There is good business to be had in buffalo and buff lights and prices continue to advance by Rs0.50-1.00 over previously sold levels. Cow calf demand is there continuously but supplies are still too meagre to talk about.

Regular business now in buff calf with the season underway and prices are firm.

With regard to exports, business in goats slowed down due the end of year holidays. There was more interest from the Far East than from Europe. Prices remain firm and the prospect of seeing them reducing in January are dim.

There are enquiries for heavier selections but sellers prefer to wait in order to finalise their pending commitments first.

Full chrome lining demand from Italy was down due to the upcoming holidays. Some expect poor suede business to improve in the new year.

Sheep saw demand for cabrettas but tanners are reluctant to deal since the skins coming in are of poor quality at present. There are very few high selections and the low selections simply don't fit into cabretta production.

There has been limited demand in high grade resin nappa from the Far East but suppliers are not enthusiastic to quote. Full chrome natural skins sold to Japan in the now usual mixed parcels of suede/LDT/rejects.

Prices are still the same. The trade in ivory sheep lining to Europe is good but volumes are rather small.

The hectic trade in wet-blue cow on the domestic market leaves little for export. But demand is not strong anyway. Some trade in finished glazed varieties of cow calf continues.

Raw supplies of buff and buff lights in the south are very restricted and leave little to offer or trade for export. Things are a bit better in north India for the upholstery sector.

The buff calf season has started and we expect to see activity after the end of year holidays.

Instead of reducing its export tax on wet-blue from 7-4% from January 1, 2007, as originally planned, the Brazilian government has decided to increase the tax back to 9% as it was before.

This is due to a request of the tanners in Rio Grande do Sul to promote production of further processed higher value added leathers and to create jobs and increase revenues.

The Brazilian market is stable and steady with slaughter normal for December. During the first week of the month Chinese buyers were very keen to secure orders of wet-blue hides for arrival before their Lunar holidays.

Italian customers on the other hand haven't shown much interest in placing orders as the year came to an end.

Brazilians are of the opinion that prices will remain stable and firm although certain price reports state that prices in Brazil may come down a little bit in January not everybody believes that.

Even though the demand for hides is subject to weaken somewhat in the beginning of the year people tend to think that sellers have had plenty of orders in their books in order to sustain current price levels.

Trade is rather subdued in Asia these last days. The bankruptcy of the two Korean owned tanneries in China has made people more prudent in their commercial actions. It always causes a shiver through an industry if colleagues suddenly go down.

It is clear that many other tanners are in trouble with their margins and may have to slow down as long as hide prices do not fall or leather prices rise. Both look unlikely for the immediate present although tanners are fighting hard for better leather prices with their customers.

There is currently talk about China banning imports of UK hides and skins claiming the presence of anthrax. This is not true and would appear to be a political matter of tit for tat, a trade dispute between the UK and China.

It is said to have started with the English placing a ban against certain Chinese products whereby the Chinese retaliated with a whole list of products from the UK which are suddenly forbidden to enter China. Hides and skins are on the list.

It is known that quite a lot of containers of hides (and lambskins too it seems) are at sea on their way to China and sellers are worried about what is going to happen to them. Sources say a list of these shipments has been sent to the UK embassy in Beijing and at this very moment the embassy is negotiating with the Chinese authorities.

Due to the excessive prices paid at the Spanish auctions for merino and entrefino lamb, exporters are forced to raise prices for their usual customers the Turks, a price which Turkish tanners simply cannot afford.

They have their own problems with their customers, the garment buyers in Russia. The Russian shops do not sell because the weather has been too warm. At the same time the 'cargo' trade between Türkiye and Russia came to a stop about a month ago.

Coincidence? Some say this was the perfect excuse for the Russian garment buyers to cancel their orders.

Of course the weather will turn colder, and once the shops start selling and getting empty the 'cargo' business will no doubt suddenly move again. Until then, however, the Spanish merchants have to pay unreal high prices at the December auctions and heavy losses are forecasted.

There is very little activity in New Zealand lamb and sheepskin. The kill is low and many skins depart as wet-salted. Lamb prices are the same with a slight upward tendency, the first for a long time.

Printer friendly version

Email this article to a friend