Extracts from TheSauerReport

It does not mean we are coming back to normal within a few months but a move in the right direction will help us all. It may stop the continuous cancelling and renegotiating of contracts! On the other hand it is sure that we at least still have some very difficult months ahead.
The industry is moving into its slow season which means possibly till September for Europe and till July for the Asian tigers. The US dollar is somewhat stronger again versus the euro which should make export sales from Europe a bit easier and/or make up something for the price drops of American hides during the past few weeks. 

More news from participants in the Bologna fair underlines the strong reduction in the number of visitors. The good news is that because of the smaller number present, people had more time for each other and many interesting discussions took place which in turn allowed people to get a better feeling of the market.
Lineapelle is probably still the second most important leather fair in the world but was unable to escape from the general recession and as always it was far more Italian than really global. Exhibitor numbers were down maybe about 10% but most of the usual exhibitors were there. The sad side of the news was about stands present but empty since the companies concerned closed down between their stand space booking and the actual dates of the event.
All agree visitor numbers were down a lot and estimates range from a reduction between 30-50%. The good news is that there is a certain optimism with the Italians. The free fall into pure misery may be over. People agree that many are close to important decisions, orders start coming and they all have one thing in common; they all concern shoe upper leathers and nothing else! Even sole leather does not participate in the party.
The Chinese Leather Industry Assocation has been kind enough to translate the new import and customs practices (see page 4):
1. Continuation of the ban the importation of and direct exportation of semi-finished leather and finished leather (Namely the import of rawhides and skins, where the inputs are subsequently converted to semi-finished leather or finished leather and re-exported, must be subject to the normal customs duty and vat of 17%). The import of semi-finished leather is customs duty and vat free where the inputs are subsequently converted to finished leather and re-exported.
2. It is allowed to use the processing trade mode (customs duty and vat free) to import rawhides for developing related business under the following conditions:
(i) Importing rawhides for direct processing to manufacture leathergoods for re-export.
(ii) After importing rawhides for processing to make semi-finished leather or finished leather, the products are transferred to downstream leathergoods manufacturing enterprises directly or through Customs Special Monitoring Zones to be further converted to leathergoods for re-exportation.
(iii) After importing rawhides to make semi-finished leather or finished leather, the products are exported to the Bonded Zones or Export Processing Zones within the customs special monitoring zones, and the enterprises inside these zones will carry out further processing to produce leathergoods for re-exportation.
3. When enterprises submit their application to the provincial commercial departments for importing rawhides for processing, they should also submit all the required materials and the following items:
(i) Finished products exportation or deep processing carry-over contract or agreement (copies are allowed). (ii) Certificate of Examination by the Provincial Environmental Protection Agency in the location of the enterprises.
4. The provincial environmental protection departments must strictly follow the regulation of environmental protection examination of rawhide process trade enterprises to review and examine the rawhide processing trade enterprises, and issue a Certificate of Examination of Rawhides Processing Trade Enterprises Environmental Protection to those who have met the required conditions. Also, the local environmental protection departments should organise inspections. Those who do not meet the environmental protection requirements will be reported to the commercial departments in charge who will not approve their new processing contracts.  These enterprises can continue and finish their work as prescribed in the
handbook within the deadline, and the deadline will be not extended.
5. Based on the Certificate of Approval of Processing Trade Business issued by the provincial commercial department, Certificate of Productive Capacity issued by the local commercial department in charge, Inspection Certificate of Rawhide Processing Trade Enterprises Environmental Protection issued by the provincial Environmental Protection Agency in the location of the enterprises, and finished products exportation or deep processing carry-over contract or agreement, the Customs Office can proceed to file the rawhides processing trade, and start monitoring.
6. To control the total volume and importation volume of the rawhide processing trade, it should be done according to the 2005 import performance to limit the total number of rawhide processing enterprises to no more than 229 each year, and the volume of imports should be no more 660,000 tons. This year, when local commercial departments approve the import volume of a qualified rawhide processing trade enterprise, the volume should not be more than the enterprise’s actual import volume in 2005. The newly developed rawhide processing trade enterprises after 2005, and the enterprises that truly have the need to expand rawhide processing trade, must submit their applications to the provincial commercial departments which will report the application to the Ministry of Commerce for approval by the relevant authorities.

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