Demand lifts raw material prices 25%

18 January 2012

Raw hide and skin prices saw an increase of 25% in Ethiopia last month. The price of hides and skins normally lowers or remains the same during the New Year holiday season but that has not been the case last month say the Leather Industry Development Institute (LIDI) in Ethiopia.

The recent increase in prices is related to the rise in new tannery production and the growth of the leather industry according to officials with the Ethiopian Leather Industries Association (ELIA).

According to Abdissa Adugna, Secretary General of ELIA, it is difficult to ascertain if the current increases in prices are real or artificial due to the differences that exist in demand and supply in light of the competition between tanneries.

It is unlikely that price caps like those enacted in the past are unlikely to prove effective said he added.

The ELIA is working with the LIDI and the Ministry of Industry to begin the import of leather from other African countries to meet demand. The decision to import leather was made to solve the shortage of supplies for national tanneries.

The import of semi-processed leather will also reduce processing steps for local tanneries and minimise the environmental loading according to sources at the institute.  

It is expected that the import of semi-processed leather will begin by the end of the third quarter of the Ethiopian fiscal year.

Source: Capital

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