Difficult wet-blue trading conditions

15 August 2002

Despite all expectations, the hide market rose in June and then steadied in early July. Kills continued to be low and Italian tanners were booking hides for delivery in September which tended to indicate that prices were unlikely to fall in the immediate future. However, wet-blue producers continue to maintain that wet-salted hides cannot be converted into wet-blue profitably at current raw prices. This opinion is repeated by every single wet-blue producer and there is a feeling that something has to give. It is a fact that there is over-capacity in the wet-blueing industry worldwide and therefore difficult trading conditions will continue until there are further closures. We have a strong market even when we are barred in Europe from exporting to China. At the end of this year, this situation will change and life for the wet-blue stand-alone producer will become more difficult. The situation for the beef producer remains extremely difficult. Cheap beef from south America continues to pour into the country making profitable business impossible. Furthermore the over-capacity in the slaughter industry is causing exactly the same problems to the abattoirs as are being experienced by the wet-blue producers. Business is very tight all round. Prices at the end of June were as follows: * 36kg+ - 1.05 ($1.47) * 31/35.9 - 1.74 ($2.44) * 26/30.5 - 1.14 ($1.60) * 22/25.5 - 1.22 ($1.71) * Heavy cows - £27 ($38) * Light cows - £24 ($33) New season doubleface finally became established during June. Prices opened up at £7.20 ($10.10) ex yard as quantities of lambs became available. Prices crept up to £7.80 ($10.90) ex yard and during the last week of June, the Turkish tanners began to show resistance to any further increases. There were few sales in the first week in July as tanners dug their heels in. Reports from Türkiye suggested that the Russian buyers had not yet arrived and consequently tanners were producing for stock. Problems arose in the Turkish banking sector and there were a few jitters amongst sellers as memories of 1998 surfaced. Türkiye is the only player in town and many sellers can still remember past difficulties. It is also true that some sellers did not deliver the correct quality of skin which some tanners still use to this day as justification for their behaviour. Skin prices slipped back to £7.40 ($10.40) in early July and fellmongering skins went for £3.50 ($4.90) ex yard.

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