Extracts from the Hidenet World Reports – March 201715 March 2017
The latest news and views from around the globe.
South African lambskins started February with an increase of 10% due to great demand from Italian tanneries for medium/high and high-quality materials. Skyrocketing prices of Spanish sheepskins drove the increase, with top-quality lamb selling for $200 a dozen.
Contracts for central African origins (Mali and Ivory Coast) saw a decline in large-breed goats suitable for garments and suede footwear, and a confirmation of smaller sizes used for leather goods. Goatskins ended the month at $75–80 a dozen for crust. North African calf selections remained steady at $21/m2 for chrome-tanned crust and $27 for vegetable-tanned.
January’s kill was 3–4% lower than December's, but demand is not booming. Slaughter reached a high of 1.065 million head in January 2017, a figure that exceeds by 1.4% the total slaughtered in the last month of 2016, and represents the highest for any January since 2010.
Wet-blue ox prices were unchanged in February. In January eastern states weekly adult cattle slaughter averaged just over 92,800 head – down almost 20% on the same time last year and the five year average, underpinned by greater stock retention and tighter availability. Cattle slaughter is expected to decline by 3% in 2017 compared with last year, to 7.1 million head.
Brazilian rawhides were stable most of the month, rising toward the end of February, mainly due to currency fluctuations. The devaluation of the US dollar has caused many problems in obtaining new orders for wet-blue, crust and finished leathers. Exports of Brazilian hides and skins decreased in January, having shipped $150.6 million hides and skins overseas. Compared with the same month last year, 2017 begins with a retraction in both value (-1.2%) and area (-4.2%).
According to Chile’s National Statistics Institute (INE), total cattle slaughter for 2016 was 863,903, down by 6.35% over 2015. Overall livestock slaughter of all kinds decreased by 7.6%. Alejandro Vial, general manager of Tattersall Ganado, explains that the decline in slaughter and livestock production has been for three years, “mainly due to the drought in the south where many females have been cleared”.
Now that the Lunar New Year is over, China’s domestic slaughter is seeing a sudden drop-off and will remain low until around June. Sources say that, although experienced tanneries tend to store hides in the new year, they normally last until the next peak slaughtering period.
Despite fears over US demand and the negative signals coming from Asia, calf demand remained strong and exceeded supply. Prices rose sharply from France to the Netherlands because the major calf buyers had stock up for the winter season. In France, some have already set prices for September delivery, so the remaining assets will be offered without room for negotiation at €6.30–6.50/kg for white/red lighter selections. The big players have already done their buying and whoever comes last must pay more.
All French cows were stable, after increasing in January. The market will have to digest the increases, and it will not be easy because there is no work for footwear. French Bretagne were selling at €2.05–2.10 for 32kg, and up to €1.85–1.90 for central French origins.
Central French bulls gained 5¢, selling for €2.45–2.50 for 37kg and under.
German cows increased in February, with the largest changes for Northern German selections. Negotiations concluded for cows 25+ (reference selection for medium quality footwear and furniture) around €1.60/kg, 5¢ more than in previous negotiations, and up to 15¢ more for selections 25 and under.
Prices were unchanged for Southern German heavyweights, used for automotive purposes.
Northern German cows in late February traded for €1.65/kg.
Northern German bulls gained 10¢ in early February, with 30–39kg selections quoted over €2.00/kg and 40+ to €1.90/kg. Those prices were concluded for small quantities in Arzignano and in Germany. As the month progressed, German slaughterhouses tried to ask €2.30, but were getting €2.25/kg and, in some cases if the volumes are very large, under €2.20.
Greek lamb/sheep prices declined during the month. The best selection (70-20-10) destined for export lost about a dollar a skin and were at $90–92 a dozen, waiting for the new harvest.
Indian buffalo market prices were unavailable for the month of February. At the same time, limited cattle slaughter hit India’s leather industry, leading to loss of potential comparative advantage for the country’s leather and footwear industry in the export market, according to an economic survey.
India’s share of global exports of cattle hides and skins was reportedly less than 0.1% in 2013, down from nearly 0.4% in 2008. In terms of global share of Indian cattle population, it has come down to just above 12.8% in 2013 from nearly 15.8% in 1991.
Iran mutton/goat markets were unchanged, with mutton skins trading at $55 a dozen, pickled. Medium goatskins were sold at $27–28 a dozen.
Italian veal skins gained 5–10¢ in February for lighter selections and 5¢ on the upside of heavier weights. For Italian calf, skins 18kg and up sold at €3.80–4.10, and 18kg and up for €3.60–3.95. Italian cows and bulls also saw increases, with cows up 10 ¢ at €1.40–1.45 and bulls at €1.90 for 40kg and up.
Prices in Mexico dropped 64¢ in January for heavy native steers (over 53lb, wholesale dealer’s price, shipped to Chicago, FOB). The price was $75.05.
Dutch veal skins gained 10¢ in early February, even though footwear demand was trending toward adult bovine-finish leather. Prices continued to rise, up sharply with contracts on Dutch 16.5kg calf concluded at €5.00–5.20/kg and deliveries were scheduled until June. The Dutch price was about €1 above the French and the same amount under the Italian selection.
Dutch cows gained a 5¢ increase early in the month because sellers were in no hurry, thanks to low slaughter, anticipated low supply and good demand. They closed the month at €1.60–1.65.
Wet-blue ox and heifer selections gained a few cents, while wet-blue cows were on the losing side, giving up a cent or two. Wet-blue ox selection 80–20%, traded at $88.00 for 20–24kg, $95 for 24–27kg, and $105 for 27kg and above. The market for sheepskins remained generally weak, with no signs of recovery for origins adapted for leather garments, such as New Zealand, with no interest from European tanneries. Standard lamb skins sold for US$32 a dozen, pickled.
Norwegian cows, saw an increase driven by the rise in German prices. Late February prices for 17kg and up were €2.65. Bulls 34kg and up were steady at €2.70/kg. Skins gained up to 10¢: 11–17 kg sold at €3.00–3.10 and 17–24kg were at €2.85–2.90.
Polish cows earned increases of 5¢, trading at €1.60-1.75 for 26/27kg. Bulls rose by a few cents, at €2.30 for 40kg and up.
Moscow has extended its wet-blue export ban until August. The Russian Ministry of Industry and Trade reiterated that the decision was a “strategic necessity, linked to the scarcity of raw materials on the domestic market and the need to keep it available for the domestic manufacturing industry.” Russia also opened a tannery in the Smolensk region – Vyazemskoye Leather Production LT – on 27 January. Monthly production volume is about 140,000m2 of finished leather. The plant will take 11% of the Russian market of natural leather and crust (without leather trim front), surpassing foreign manufacturers.
Top Spanish sheepskins soared in February. Sellers were getting up to €10.00 a skin for the Merino selection, while for shearling the price was around €15.00. Entrefino doubleface was at €9.50–10.00 while Lachaune Lechal jumped from €6.50 to €8.50. Spanish cows saw increases of 5–10¢, ending at €1.70. Bulls were steady at €2.05/40kg and up.
The upward movement on Northern German cows has been transferred to Scandinavian hides, with increases achieved on all sources, with peaks of €2.35/kg for Sweden, from €2.10/kg.
Irish ox/heifers (36+) increased a few cents due to increased demand for British heavyweights. Some buyers of Northern German selections shifted some of their purchases to the UK for qualitative reasons, noting a decrease in levels by some German suppliers, and for the price increases registered in recent weeks for Northern German 25+.
British ox remains the most cost-effective and lends itself to processing for leather goods, footwear and to automotive for the heavier versions.
The market for fresh hides went up more than 5¢ due to increased demand during February. For January, slaughter was up 11% over the same period the previous year, at 174,568 head.
After the Chinese lunar holiday, sales volumes of Heavy Texas steers were still slow, but prices were firm. Heavier averages in late February were typically in greater supply than seasonal weights, such as 64/68lb. Some sales on 66/68lb. were posted at $73.00. Minimum averages for 74lb advanced to as high as $75.50 with earlier trades booked at $75.00. Overall, US prices in North America have risen since the end of January.?